Ireland accelerates its research on the road to commercialisation

22 Jun 2017

Image: Krivosheev Vitaly/Shutterstock

In just under 15 years, Ireland’s research ecosystem has gone from being a tech transfer backwater to a world-class destination, writes John Kennedy.

It would be an exaggeration to say that tech transfer didn’t exist in Ireland around the turn of the century. It would be closer to the truth to say that it was minimal compared to international norms.

On a sunny Thursday evening in May 2002, I sat in the office of Bill Harris, the newly appointed director general of a brand new state agency called Science Foundation Ireland (SFI).

‘This is one area of state policy that is definitely working’

The key to Harris’s mission was in the name of the new agency: foundation. He had to lay the groundwork for what was going to be the biggest scientific infrastructure upheaval on the island.

Harris, a distinguished, high-ranking US academic with 18 years under his belt at the National Science Foundation, told me at the time that even if you combined all the universities in Ireland into one, it would come nowhere close to the scale of an American university such as Stanford, and therefore all of the universities had to work together through the establishment of centres of expertise.

He also said that Ireland needed to field many more PhDs.

Zoom forward to 2017 and the groundwork has not only been laid, but the arteries and roadways of research across areas from software to food, renewable energy, geosciences, nanotechnology, pharmaceuticals, photonics, medical devices and telecoms are flowing at full tilt.

SFI today supports 12 research centres through an investment of €355m. All 12 have signed in excess of 400 collaboration agreements with more than 280 companies, and it is understood that another 175 contracts are in negotiation.

Between them, the 12 SFI research centres have achieved €46m in cash commitments, and a further €45m in industry in-kind commitments.

Currently, 575 PhD students are in training funded by SFI – providing a vital talent pipeline to industry – while a further 890 PhD students are in training by other sources.

What has also been remarkable is how closely SFI collaborates with other state agencies, such as IDA Ireland and Enterprise Ireland, to make Ireland a destination for world-class research.

Last year, SFI had more than 1,600 collaborations with industry. Of these, 929 involved multinational companies and 674 involved SMEs from every region of Ireland.

Overall, Ireland’s commitment to science is in line with a stated goal under the Innovation 2020 strategy to make the country one of the top research locations in the world by 2020. The Government allocated €761m for R&D in 2016, the third year in a row that funding has increased. Out of this, SFI has an annual budget of €162m.

Across the board, Ireland’s road to commercialisation from research is accelerating.

“To get a sense of how the research centres have achieved their goals, there have been two prominent examples in recent months,” explained Dr Darrin Morrissey, director of programmes in SFI, overseeing all SFI research funding programmes and management of funded awards. “Facebook-owned Oculus acquired InfiniLED in Cork last year to power the future of VR and AR. InfiniLED grew out of photonics research at the Tyndall Institute at UCC.

“In recent weeks, Dundalk software company Nova Leah, which emerged out of research at the Lero research centre, announced it was creating 78 new jobs to provide better cybersecurity for medical devices.”

The crisscrossing of paths between entrepreneurship and hardcore research was demonstrated this week when the inaugural Enterprise Ireland Founder of the Year award went to Tony McEnroe from SiriusXT.

“This award is a testament to the world-class research which was carried out over many years by my three fellow co-founders, Dr Kenneth Fahy, Dr Fergal O’Reilly and Dr Paul Sheridan, as well as a dedicated team of researchers, within the Spectroscopy Group in UCD’s School of Physics.

“Our SXT100 microscope, which we plan to launch onto the market in 2018, will be the first commercial lab-scale SXT microscope of its kind in the world. It will allow researchers to illuminate whole single cells or tissue samples and produce 3D images that cannot be produced in any other way.”

Breaking ground

The strategy to put Ireland in the first division for science research and commercialisation relative to its scale is clearly working. But it would be wrong to suggest that tech transfer is only a recent phenomenon in Ireland.

‘We didn’t have a system for funding research. People begged, borrowed and stole to commercialise their research, and often it was a personal risk’

“People dabbled in tech transfer far back in the annals of time. Ireland has a strong scientific heritage that we just need to get better at celebrating,” said Gearóid Mooney, division manager in charge of research and investment at Enterprise Ireland.

“In more recent times, in the 1980s, companies like Mentec came out of Trinity College. These were people who were entrepreneurial by instinct. Iona Technologies did it in the 1990s because they wanted to do it. You can’t make people want to be entrepreneurs no matter how many incentives. They have to want to do it.”

Mooney said that these early forerunners emerged from research and succeeded in spite of, and not because of, what supports existed at the time. “I worked in a spin-out from DCU myself in the 1980s. While the college was tolerant and helpful, there was no one there to guide you on legal agreements or connect you with industry or investors. There were people who saw the road ahead and did their best, like Dr Pat Frain from UCD (founder of NovaUCD).

“Now, things have changed and there are tech transfer offices in every college and university across the country.

“It also had a lot to do with attitudes among faculty. You can definitely say that the number of people trying to commercialise what they are researching has gone up.”

Money was a critical factor before SFI came on the scene. There simply was none. “We didn’t have a system for funding research. People begged, borrowed and stole to commercialise their research, and often it was a personal risk. There are a lot of personal stories behind each of those early breakthroughs,” said Mooney.

Enterprise Ireland is currently working with 119 spin-out companies from the university sector, including companies such as Stokes Bio and NVMdurance.

“We needed outliers to show what was possible, and a good example of commercialisation was FeedHenry, which spun out of TSSG at the Waterford Institute of Technology and which was acquired by Red Hat for €63.5m.”

Mooney said that the culture has moved on. “If you are really determined to do a spin-out, Enterprise Ireland – under its Commercialisation Fund – will provide the money to de-risk your project while you are still in university and before it is a company. It can cost anywhere between €100,000 and €500,000 to produce a minimum viable product.

“Researchers are still expected to build basic science but, if someone has something that has been proven on a bench, if there is a market for it, we will invest in it. We currently invest in about 40 projects a year and it probably gives spin-outs an advantage over ordinary start-ups.”

Another key facet in Enterprise Ireland’s work in the commercialisation of research is the provision of mentors. Under its Business Partners programme, it connects seasoned entrepreneurs with C-level experience to work with researchers.

“When it happens, even in a small way, it produces extraordinary results.”

An example of this would be how Cathal McGloin was introduced to FeedHenry and became its CEO to spearhead its dramatic growth journey.

“They had spent years going nowhere, and McGloin – who had a track record in software – refocused them on their core product and they found a market.”

Mooney pointed to similar results at High Potential Start-up spin-outs such as UCD’s OxyMem, and at Trinity College Dublin spin-out Solvotrin Therapeutics, which is now headquartered in Cork.

“I would say that, in a very short space of time, Ireland has made a big impact in terms of tech transfer.

“I look with pride at the fact that, three years ago, the European Commission made a review of tech transfer ecosystems and Ireland was rated number one for getting economic value out of its research.

“We are well up there and there is probably always going to be a scale issue – the research system could always do with more money – but we are getting quality. The quality of PhD researchers and the quality of investments and the quality of spin-out opportunities are improving continually,” Mooney said.

The next Valley

Ireland has also become a critical hub for R&D among tech and pharmaceutical multinationals locating in Ireland, explained Ken Finnegan, chief technologist and research advisor at IDA Ireland.

‘R&D is expensive, and the cost of a graduate salary in Silicon Valley is between $100,000 and $160,000, so companies are looking to alternative locations they can trust’

This stemmed from a growing trend of companies in pharmaceuticals, software and telecoms locating research closer to manufacturing, but has accelerated thanks to the presence of the SFI research centres.

“The spirit of innovation partnerships – whereby companies want to work with research centres – are being availed of by multinationals, whereby up to 65pc of an innovation partnership will be funded to the research centre and the companies will fund up to 50pc in cash or 30pc in-kind.”

Finnegan said that a key aspect is convergence fuelled by the various megatrends in areas such as internet of things, connected health and AR/VR, and turning them into real applications and business models.

“Fujitsu, for example, is very focused on connected health. Intel is similarly interested in connected agriculture.

“These research projects can avail of feasibility study grants that will fund up to nine months of research. Many companies that have located in Ireland that wouldn’t have dedicated R&D functions are availing of these to see opportunities and harness capabilities or mitigate the risk of going in to new markets.”

Finnegan said that Silicon Valley giants, for example, are more open to locating core R&D outside the region and, in this vein, Ireland is competing with other countries – including the the UK, the Netherlands and Singapore – for this kind of investment.

“R&D is expensive, and the cost of a graduate salary in Silicon Valley is between $100,000 and $160,000, so companies are looking to alternative locations they can trust, where the skills are available. This is working in Ireland’s favour because we have the skills. We are at a critical mass in terms of capabilities.

“Also, the fact that we are in the EU means we have access to the skills of a population of around half a billion people.

“Cost and staff retention are the two main reasons why companies are looking to Ireland instead of the more expensive R&D locations.”

Finnegan said that Ireland is garnering a reputation for applied research thanks to the combination of the various Enterprise Ireland, IDA Ireland, and SFI research and tech centres.

“There is a land grab for skills underway, especially in the area of AI, machine learning and natural language processing.”

The key, Finnegan explained, has been to always evolve with companies’ changing needs. He pointed to IBM, which came to Ireland in 1956 to open a sales office. Today, IBM’s operations include the largest software engineering group outside the US, working on cutting-edge research and technology such as the Watson platform, AI, cognitive computing, cognitive reasoning and the internet of things. “It shows the journey of a multinational in Ireland from low-skilled activities to cutting edge R&D.”

The perfect storm of convergence, where digital disruption is transforming traditional businesses into technology businesses, is also helping Ireland’s research cluster.

Fashion brand Ralph Lauren, for example, is investing in a digital innovation centre at Sir John Rogerson’s Quay.

“Ralph Lauren didn’t come to Ireland for our fashion sense,” Finnegan joked. “It is all about convergence, and the fact of the matter is that there are lots of companies trying to figure out how to become tech companies. It really is a perfect storm.”

Finnegan explained that the IDA itself is having to evolve and is working with industry to evolve the academic supply chain towards its needs. A perfect example of this is the creation of a new master’s in artificial intelligence (AI), which will debut in the country’s universities in September 2018.

“That was devised through collaboration with the whole cross-spectrum of research and business in Ireland, involving academics, multinationals, start-ups, Enterprise Ireland, SFI and IDA Ireland.

“We did an audit of the various courses and realised that the demand is so big. The feedback from the multinationals was that if we establish this national master’s in AI, then we will definitely attract more investments, especially in research.”

Making Ireland a global leader, not a follower

SFI’s Dr Darrin Morrissey said that the higher education research sector, which receives €165m per year in funding from SFI, is motivated to achieve the Innovation 2020 goal of making Ireland a global innovation leader.

‘The challenge is to ensure that innovation remains Plan A for Ireland, and to keep that investment up to achieve the Innovation 2020 strategy goals’

“Our ambition is to increase Ireland’s research funding to more than 2.5pc of GDP, which is above average in the EU.

“It is clear that, when we put funding into the system, we are really getting top-quality people. This is not only for the research sector, but also for industry. This has a knock-on effect of increasing the number of high value, innovation-oriented jobs in Ireland.

“Ultimately, Irish research discoveries and science have the highest level of societal impact.”

Morrissey said that it has been a testament to Ireland that the country increased its science and research budgets throughout the economic downturn.

“Our mission is applied and basic research, and ideally combined in one location. Commercialisation is just one output of research, and scientific impact of research will always matter.

“We run around 25 different programmes with various types and styles of funding – and out of those at least six are commercially focused, orienting towards companies getting founded, spun out or involved.

“The research centres are playing their part and are bringing in €190m of industry investment.

“Our research centre are real hotbeds of basic research but also applied with the potential of generation intellectual property and spin-outs. It’s a real-game-changer.

“The research centres have signed over 500 contracts with SMEs and multinationals, with over €120m of cash combined with in-kind investments.”

Ultimately, from a situation where tech transfer barely existed in Irish universities, the foundation laid by Harris 15 years ago and the baton that has been carried by agencies such as SFI, IDA and Enterprise Ireland has resulted in a new research culture that transcends academia and industry.

“The whole landscape has been phenomenally transformed. The biggest change is culture.

“Historically speaking, as someone who got his PhD in the 1990s, the focus was on an academic career and industry was an afterthought.

But now there is a sense of entrepreneurship that is ingrained in people who are doing PhDs. What has been inculcated is a deeper understanding of the value of IP and how that can be a harness to generate value, create companies and create jobs.

“The first decade of the existence of SFI was about building the foundations. Like everything, history should never be a predetermination for where you are going, but it explains where you are.

“We accelerated our science research strategy all through the economic crisis and the plan is to put in €1bn over the next five years.

“The challenge is to ensure that innovation remains Plan A for Ireland, and to keep that investment up to achieve the Innovation 2020 strategy goals,” Morrissey concluded.

“This is one area of state policy that is definitely working.”

Updated, 1.21pm, 26 June 2017: Following clarification from SFI, Dr Darrin Morrissey’s title has been amended. 

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years