Final review DIP project

This week we celebrated the final review of the DIP project (http://dip.semanticweb.org/), which stands for Data, Information, and Process Integration with Semantic Web Services. DIP is a 16 MEuro, 3 year project partially funded by the European Commission, involving about 20 top class industrial and academic partners, including SAP, BT, iSOCO, Unicorn (IBM), Hanival, OU, EPFL, FZI, etc.). DIP finishes on December 31, 2006.

During the final review of two days, 40 members of the consortium presented the results to three external experts hired by the EC, and to the EC Project Officer. Wonderful new technology has been developed that has the potential to change businesses in the future. In the context of this blog, I am especially interested in what happens with all this technology once the project has finished. Of the two day review, almost half a day was dedicated to exploitation plans, which in itself is a positive exception. Exploitation plans lay out the realistic intentions of the consortium to use (apply, commercialize) project results beyond the scope of the project.

The highlights of the exploitation session included:

• Many different kind of commercial exploitation plans
• Firm commitment to create a new company
• Acquisition of DIP partner by large IT company
• Vertical exploitation of case studies in particular sectors
• Horizontal exploitation through acquisition of DIP partner
• Joint exploitation plans for large organizations and SMEs
• All licensing for core technology is Open Source
• Academic exploitation through take up in many recent R&D projects
• Strong influence on standards in two leading standards bodies

In three or five years we will see how many of the exploitation plans have become reality.

Needless to say, that the review was a big success (flagship project, an example).

There is also a movie available explaining the value of the project in terms of three particular sectors, e-government, telco, and e-banking. I will make the movie later available on this blog.

TinyURL

Innovation is sometimes defined as “the introduction of something new and useful”. A very simple example of such innovation is http://tinyurl.com. It changes long URLs into short ones. How often have you received en email with a URL (often to a dynamically generated webpage from a database) of several lines that your mail client has broken into parts that you need to copy and paste manually into your browser? Too often? Tinyurl solves this problem completely by turning your long URL (before sending it by email) into a short one. It works, it is simple, and free. That is innovation!

Budget for Writing Exploitation Plans in R&D Projects

Needless to say that the IST program of the European Commission is enormously stimulating the R&D activities in European universities and companies. But what about real innovation based on this research?

As mentioned previously, and as I will explain in later writings, the commercial exploitation of R&D results is not easy. It starts with designing good and realistic exploitation plans. A fully fledged exploitation plan is something like a business plan that you can present to top management or VCs with the objective to raise money for starting a new business.

Even though the European Commission (EC) is keen on commercialising technology and tools originated in European IST research projects, their main objective is to investigate and develop new technology, not to innovate in businesses and society. EU research projects thus focus on exploitation plans, while other programs such as eTen or eContent Plus focus more on respectively commercialisation and applications. However, the largest share of public funding goes to IST research projects.

This creates a situation where

• The EC is very keen on commercial exploitation plans of consortia
• The research projects are not the optimal instrument to generate realistic, well founded exploitation plans (for several reasons, as I will explain in later writings).

Below you can see an illustrative table with some of the projects I have participated (participate) in along with the relation between effort dedicated to R&D, and effort reserved for dissemination and exploitation plans. Notice that most of the projects are in the Semantic Web area.



On average, only 8 percent of the effort is devoted to dissemination exploitation, so even less is dedicated to writing exploitation plans. We have to take into account that those efforts are assigned by the consortia themselves, not by the EC. Although the percentage is low (with the exception of the last two projects, Super and Neon), the actual efforts in person months are not so low. E.g. 36 person months is equivalent to three persons working full time during one year on a particular topic. Yet, it seems very hard for consortia to come up with realistic exploitation plans that –after project termination- give rise to commercial exploitation. Several reasons come to my mind.

• The interest of people participating in research projects is research, not marketing.
• Exploitation is considered as a requirement imposed by the EC at the time of proposal submission and contract negotiation, and therefore is added artificially.
• Researchers are good at research, not necessarily at writing business plans.
• Research projects are long term (3-4 years), whereas commercial opportunities are planned on a shorter time scale.

I can continue enumerating many more reasons. I will elaborate on some of them later on, and also provide some ideas on how to improve the commercial exploitation of research results. However, this is mainly a high-level political issue to “make the EU the most competitive and dynamic knowledge-based economy in the world.”

Keep innovating!

Innovation and European R&D (IST) projects

In the past years (FP4, 5, 6), I have extensively participated in European IST Research projects. More and more I have seen a shift of the European Commission from basic research to commercial exploitation. The “Exploitation Plans” of the consortium are one of the most important topics during the final reviews. An exploitation plan lays out the plans of the consortium (members) of how to commercially exploit the R&D results obtained during the project. Take into account that, for private organizations, EU projects are co-financed between the EU and the private organization. Some return on investment would not be so strange …

How often do R&D results of European Projects hit the market successfully? Actually, I do not have figures or statistics on this, but would be very interested (anybody has an idea? Please let me know). It is my impression –both as researcher and as EC reviewer and evaluator- that there are very few R&D results that make it successfully to the market. And this is a pity. In the following writings I will analyse why –in my experience- this is the case, talking about factors such as:
• The relative budget allocation to “exploitation” of R&D results,
• The composition of consortia (people organizations),
• The ambition of proposals (the sky is the limit) versus the reality at project end,
• The speed at which things happen in large R&D projects versus the rapid changes in the market and technology landscape,
• The innovation funnel,
• The technology adoption lifecycle,
• Gartner’s Hype curves,
• European university education on creating companies,
• European entrepreneurial culture and mentality,
• Etc.

The EC goal (Lisbon Council) is/was to make Europe the most competitive knowledge-based economy in the world by 2010. That only can/could happen if innovation happens at a very rapid pace, bringing new technology to the market in record times. That is still an important goal for Europe, and something I feel as a personal mission related to Semantic Web technology. But it is very hard; success is more an exception than a rule.

Stay tuned.