Ela Romanowska

Seed Fund Manager

IFCO

November 2004

THE

INNOVATION FUND

Catalysing technological innovation

in South Africa

OPPORTUNITY TO INNOVATE

Telecomms deregulation

Open Source

ICT Roadmap

Early successes

SA priorities

PRESENTATION OVERVIEW

Background – from research to innovation

IF overview – Objectives, beneficiaries, Instruments, Scale of funds

IF project examples – General & ICT specific

“Rough Guide” – lessons from Fund Management

PRESENTATION OVERVIEW

Background – from research to innovation

IF overview – Objectives, beneficiaries, Instruments, Scale of funds

IF project examples – General & ICT specific

“Rough Guide” – lessons from Fund Management

Population	:	43 million

GDP	:	~ $130 Billion (US)

Origins of GDP	:

Agriculture	~ 4%

Industry of which	~ 32%

Manufacturing	~ 20%

Services	~ 64%

Unemployment	:	~ 30%

PROFILE OF SOUTH AFRICA

FROM RESEARCH CONCEPT TO MARKET

Basic Research

Publications, HR Development etc.

Applied Research

Publications, HR Development, Patents

Financial Losses; Inventory, etc.

Start-Up Company

Expansion

Revenues; Profits

MARKET PLACE

Patents, Proof of concept, Prototype, Products etc.

R&D Development

DISCLOSURE

TECHNOLOGY DEVELOPMENT &
TECH TRANSFER PROCESS

RESEARCH

INTELLECTUAL PROPERTY

EVALUATION

COMMERCIALISATION

R & D

PROTECTION

Document

Date & Sign

Witness

Invention / Device

Process / Method

Innovation

Document

Manager Confidentiality

& Non-Disclosures

New

Useful

Non-Obvious

Commercial Potential

Competition

Start-up

License

Royalty

Equity

Management Team /

Entrepreneur

Business Partnership

Due Diligence

Negotiate Research

Agreements

Project Monitoring

Milestone Driven

Patent

Copyright

Trade Mark

“Know-How”

PRESENTATION OVERVIEW

Background – from research to innovation

IF overview – Objectives, beneficiaries, Instruments, Scale of funds

IF project examples – General & ICT specific

“Rough Guide” – lessons from Fund Management

IF CREATION

Outflow of White Paper on Science and Technology : notion of a “National System of Innovation”

First projects late 1990s

Initially focussed on Science Councils/Research Institutions, evolved to being open to private sector

Initiative of the Department of Science and Technology, managed by the National Research Foundation

IF OBJECTIVES

To promote technological innovation within the research community

To promote the key issues of competitiveness, quality of live, environmental sustainability and harnessing of information technology

To promote multidisciplinary and cross-sectoral collaborative research and development programmes within South Africa’s national system of innovation

BENEFICIARIES OF THE IF

Involved in R&D aimed at the promotion of technological innovation

Business

Academics

Science Council

Researchers

Parastatals

IF FUNDING INSTRUMENTS & SUPPORT

Missions in Technology (MiTech)

(R15 million as matched funds with industry co-investor, 5 yrs)

Full economic costs, 5% royalty

Technology Advancement Prog. (TAP)

(R15 million, no matching funds required, 3 yrs)

Full economic costs, 5% royalty

Patent Support:

Patent Incentive Fund – Financial rewards for stat-funded inventors

Patent Support Fund – Matching funds to assist in international patents

Tech Xfer offices (TTOs)

Commercialisation Support:

Seed Fund – R5 million preferably as co-investment with VC (primarily prior IF projects), equity

General assistance with Commercialisation of outcomes from MITECH, TAP

Technology Promotion

National Innovation Competition (NIC) – Student business plan competn.

CONSORTIUM APPROACH

Multi-disciplinary

Public-Private Partnerships [PPP]

Focus on small, medium enterprises/sector

Revenue track record

>x = MiTech

<x = TAP

Equity holders in start-up

Ownership of IP

Novelty/Innovation/Technology:

Highlight why the product is technologically innovative

Technology risks

Market Need/competitiveness/Commercialization

Market Study [size, customers, sales, competitors]

Consortium:

technical & business competence

BEE

National benefit:

increased employment

new capital investment

improvement in competitiveness of South African Industry

creation of a new market sector

Global Impact:

Export potential of the product/process, service

compliance with international best practices/requirements

competition with international products

TAP & MITECH CRITERIA

DST Funds to the IF (1998-2004)

Summary of IF Investment portfolio

664,648,684

106

612

TOTAL

14,263,000

2

Included in MiTech call

2002/2003 TAP

21,840,000

6

150

2002/2003 MiTech

101,681,542

12

127

6

94,082,517

11

209

5

104,167,214

18

126

4

104,364,411

16

Applications received by DST

3

127,261,000

22

Applications received by DST

2

96,989,000

19

Applications received by DST

1

Commitments (R)

Grants awarded

Pre-Proposal applications received

Round

NB. The 612 pre-proposals is limited to the total applications received under the new IF business process.

Analysis of the ICT Sector

Total awarded per beneficiary category

PRESENTATION OVERVIEW

Background – from research to innovation

IF overview – Objectives, beneficiaries, Instruments, Scale of funds

IF project examples – General & ICT specific

“Rough Guide” – lessons from Fund Management

Bio-ceramic Eye

Intelligent Firearm

ICT RELATED PROJECTS

National health knowledge network

Virtual learning spaces

Collaborative African virtual environments

Culture preservation

High speed microwave radio modem

Development of innovative ICTS (rural applications)

Software for the prediction of workplace environmental conditions

Smart digital cameras based on one-dimensional sensors applied to industrial processing and medical environments

Developing a GIS based decision support system for the Lubombo spatial development initiative

Multisensor microsatellite imager

ICT solutions for power optimisation

The computer electronic interface for the primary healthcare telemedicine workstation

African speech technologies

PRESENTATION OVERVIEW

Background – from research to innovation

IF overview – Objectives, beneficiaries, Instruments, Scale of funds

IF project examples – General & ICT specific

“Rough Guide” – lessons from Fund Management

FIRSTLY : KNOW THE LANDSCAPE

Seed Fund

THE “ROUGH GUIDE” TO SUCCESS …..

Don’t disclose, see a patent attorney

If in doubt file a provisional – gives credibility

Look up and out (RTFW)

www.uspto.org, www.espacenet.com

www.dogpile.com, www.aardvark.co.za

If you think there is no competition, you either have not found it or there is no market (!!!)

If you cannot name (by company) your first client you are starting on the back foot (market, market, market)

You need a champion – an almost full time professional

Funds fund solutions not problems

Serial not parallel inventors good

Investors look for reasons not to invest – keep it simple and don’t hide stuff

A letter from an initial client saying “I will buy x of these for Ry if its performance meets z”

An idea without people has no net value (50year rule) : Funds fund people not technologies

There is strong competition; be the best ….

THE “ROUGH GUIDE” TO SUCCESS ……

BE THE BEST

IF would fund

New Technologies

to improve accessibility for disabled

to improve usability for non computer literate

that improve services, lower costs

... which meet the other conditions/criteria

IF would not fund:

Yet another database

Yet another portal

Implementation of existing technologies or products

IF FOCUS : ICT CONCEPTUAL EXAMPLES

The Innovation Fund is

an initiative of

the Department of Science and Technology

Managed by the National Research Foundation

www.innovationfund.ac.za

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ifpa

2004-05-27T15:14:52