Intermediaries

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Module 1. Intermediaries
Much of the content of this Technology Commercialization Handbook relates to universities and public research institutes transferring technology to large or small companies, as well as absorbing technology and know-how from elsewhere to help develop products to meet regional needs as well as increase research and R&D capacity. Intermediaries can make the connection to markets when you are either looking for technologies to absorb and adapt for local needs or markets to commercialize new products or services.

A question to ask is if an “intermediary” – an organization or an individual - with experience of common situations can make the transfer process more efficient? Is an intermediary needed or not? How will the intermediary add value? How much value could be added?

Typically, although there are exceptions, the less developed the country the more intermediaries can add significant value. Organizations and individuals in more developed countries have better connections to better developed networks than in less developed regions, and thus have less need of help to make connections.

For example, an intermediary may:
 * 1) Help find technical solutions for users of technologies and innovations, find users for new technologies
 * 2) Help in identifying the technology/needs match
 * 3) Find and help leverage resources
 * 4) Packaging and promotion of expertise at universities and research institutes
 * 5) Negotiations and business development, reduce transaction costs
 * 6) Help with IP issues in inward and outward licensing
 * 7) Provide access to finance
 * 8) Complete agreements with other organizations much faster than formation of a direct company/government relationship

 The task of an intermediary will be made easier if there is a "champion" or "integrator" within the organization who will support the project and help overcome internal barriers. An integrator can bring together all the necessary components to work with the intermediary.

 Intermediaries may be:

Innovation intermediaries. An organization to encourage and support a region’s efforts to bring together technologies, know-how, and resources to work together.

 The non-profit group Connect formed in conjunction with the University of California-San Diego [] model features inter-institutional exchange of knowledge and technologies throughout San Diego’s research community. It creates opportunities for entrepreneurs, researchers, scientists, business service providers, and industry through structural, informational, and educational activities can lead to strong regional collaborations. Attempts to set up innovation intermediaries will usually fail if they are driven "top down" by those who see an opportunity to earn income by managing the intermediary. It's better for the intermediary to be driven "bottom up" and created by potential users of the services to be provided.

Technology Transfer Offices can be important intermediaries.

Specialized intermediaries: An organization with the resources and networks needed for a particular project. For example, a start-up company is seeking product development partners in regions or other countries where they wish to market their products. A professional/trade organization may be able to identify the right contacts.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;">Case example of a specialized intermediary

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;"> A middle-income country has established an operating system of Technology Transfer Offices at selected public research institutes. A foreign investment fund is interested in providing, or finding, investment funds for completion of R&D and new product development leading to globally competitive products or services. But, the in-country research institutes don't have the experience to (i) complete the final stages of developing a new products or services for which there is a market demand or (ii) contacts in the potential global markets to assess market feasibility and actually market the products or services created by the research institute. This is a common situation.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;"> An intermediary is needed to bridge the gap between early stage product development and later stage product development and placement in markets.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;"> An ideal intermediary in this case will be a Contract Research Organization (CRO). CROs solve problems or develop products for corporate clients - who have decided to "outsource" selected R&D or don't have the necessary in-house capacity. [need to cite examples of CROs ]

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;">Incentives, rewards, and conflicts of interest for intermediaries

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;"> We all like to be rewarded for our work, usually by being paid for it as well as having the satisfaction of seeing our work produce positive outcomes. Intermediaries need to be rewarded and have incentives to perform well. However, care must be taken to avoid possible conflicts of interest.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;"> If the employees of the Technology Transfer Office were given extra pay (a bonus), for example based on the amount earner by a license, an employee might be accused on focusing only on the project which would bring the TTO employee the greatest or fastest financial gain. Conflicts of interest would occur. Therefore it is usual for employees of TTOs which are part of a university or public research institute to be prohibited from having any financial interests in any technology transfer agreements, including ownership of shares in spin-off companies. It is also important that TTO employees be paid competitive salaries. A related problem is from public research institutes in one Eastern European country which have difficulties hiring and retaining qualified IP lawyers because the pay scale is very low compared to commercial law firms.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 100%;"> The situation is different for specialized intermediaries. For example, if the intermediary is an investor, or associated with an investor, then that investor will naturally expect a return on their investment. Take the case of a country which grows mangos but need to adopt technologies from outside the country and adapt for local needs which includes reducing waste in mango processing and producing more mango juice and dried mangos for export. A specialized intermediary which facilitated and financed the absorption and adaption of such technologies will expect a financial stake in new businesses which may be created or perhaps a cut of new income flows.