Luxembourg invests more than €330m in research and academia every year. University spinoffs are one way of getting these groundbreaking discoveries out into the world. But with 15 spinoffs created by the University of Luxembourg and its partners, is Luxembourg doing enough?
Dr Alberto Noronha faced a bind when he finished his PhD and began his fifth year at the Luxembourg Centre for Systems Biomedicine as a research associate. He had promising research results concerning his biomedical data research. However, at the end of five years, he had to land a permanent university contract or leave. “I couldn’t stay at the University to lead the project because the research group was dissolving,” he recalled.
Using the science and IP to create a university spinoff presented one way to continue the research. Noronha obtained FNR Jump funding to create NIUM, which in 2019 began generating revenue for the startup.
Licensing IP
It has been challenging, however. NIUM is finalising negotiations to license additional IP from the university but these negotiations have been lengthy. Noronha said: “I understand that the university needs to ensure that their interests are protected, but at the same time, timelines really can jeopardise projects.”
Noronha learned the hard way that startups need to guarantee that the IP is secure in order to attract potential investors and scale. He reckons that it would help future spinoffs if there were greater clarity and agility in this process so that IP is valued for both research and commercial purposes. “Universities keep generating IP, but that IP sometimes doesn’t see the light of day. It’s just a research project that is not translated to the market for the full benefit of society,” said Noronha, adding: “I think that from a strategic point of view, it’s very important that we have ways to test these technologies in the market and be a little bit more innovative trying to bring them for the benefit of society.”
“Universities keep generating IP, but that IP sometimes doesn’t see the light of day. It’s just a research project that is not translated to the market for the full benefit of society”
Dr Alberto Noronha NIUM co-founder
A regulatory framework outlining the licence evaluation process could help here and should include guarantees for researchers in the event market test results are successful, to avoid a larger firm swooping in and licensing the IP.
The framework could be inspired by the US university systems, addressing not only IP but also questions around how much equity a professor can take, as the founder points out that negotiating with a professor can be delicate for a researcher. The founder said: “If it’s not clearly laid out, that will stop a lot of people from going through the process because it’s not an easy thing to do.”
Changing the way they work
François Fouquet, a former researcher at the strategic research institution the SnT, co-created machine learning big data startup DataThings in 2017. His team recognised that a spinoff was the only way they could continue working together long term. The shift was striking. “Creating DataThings completely changed the way we work,” said Fouquet. “It was no longer about publishing papers, or communicating our results to the rest of the community but about preparing a product.”
The team had to adapt the technology to market needs and adapt its way of working. The biggest learning curve was accepting the time to market–it has taken the firm six years to be able to deliver its product. “Usually you think that the research is done when you publish a paper. With a product, it’s a long journey. You need to create the technology and mature it to a product, but also create a need in the market and a technology partner to make it a success.”
Close collaborations with Paul Wurth (DataThings was incubated in the Paul Wurth InCub) and Creos, helped grow its service activity, which in turn financed the product R&D. While the current energy crisis helped to accelerate market maturity for DataThings’ technology solutions, Fouquet found the speed to market frustratingly slow in comparison with US startups which are turbo-charged with VC funding.
Researchers may be discouraged from pursuing the spinoff path once they realise that it can take up to six years to validate a product with no guarantee of success. Fouquet would like to see the creation of programmes that enable them to test products over two years allowing them to move on quickly in case of failure and limit the impact on their career.
“Usually you think that the research is done when you publish a paper. With a product, it’s a longer journey”
François Fouquet, co-founder of DataThings
Lack of talent and resources have proven to be further challenging. Looking back, Fouquet thinks DataThings would have benefited had academics been allowed to join the project while remaining employed at the university.
“You have to do a cut. And that’s a little bit harder because the researcher will have to choose whether to continue in academic areas or pursue a startup career. And that’s not really necessary,” he said, adding: “I think this is the big slowdown because it forces people to choose and restricts the speed and pace you could grow when normally you have a set of well-trained engineers and PhDs which would be ideal for startups.”
Sourcing talent
DataThings currently employs 18 people, many of the original team hired from academia. But like countless other startups in the region, its growth suffers from the shortage of profiles. Creating exciting new projects through spinoffs could be one way to attract talent.
Another source of talent could be the creation of a new study offering which combines data science and developer skills, a profile that DataThings has struggled to fill. “In today’s world we prototype on one side and we transform it immediately for production and that’s not a smooth process at all,” Fouquet said, adding: “You cannot just do data science without understanding the infrastructure that runs it or without knowing how to optimise it to make it into something really fruitful and useful for production.”
Much has been done in Luxembourg. In 2017, the University of Luxembourg launched its Entrepreneurship Programme, enabling access to business skills through initiatives like the Ideation Camp. The same year, it launched the University of Luxembourg Incubator, a platform which supported NIUM, and was created to help bring business ideas to market. And in 2020, the SnT launched its acceleration program to support its researchers in their entrepreneurial projects. The university’s Partnership, Knowledge and Technology Transfer (PaKKT) Office, meanwhile works with companies and civil society for the creation of spinoffs.
Wasted talent
But, to achieve a critical mass of spinoffs, work is needed to show researchers well before the end of their five-year mandate, that there exist other career opportunities. As Noronha said: “There’s a huge investment from the state into the research ecosystem and if we’re losing all that talent, that’s a wasted opportunity.”
The University of Luxembourg acknowledges more needs to be done to identify potential transferable results, starting with “the right team who could lead this knowledge and technology transfer.”
It told Silicon: “Many topics can find a way towards economical or societal valorisation, but creating a spin-off is not the only and best solution to get research results transferred and used. The best potential founders are often students, PhD candidates or post-doc: we are working on accelerating their awareness and providing them with a complete innovation eco-system in Luxembourg. This is being built, with new incubators and new support schemes.”
