01/12/2011

By Modwenna Rees-Mogg, AngelNews

In recent month’s we have been consulting with large corporate companies about their innovation strategies, and so we thought who better to speak to about the state of Open Innovation in the UK than someone who is expert in working with consortia of large and small companies on R&D development?

So I was sent off to catch up with Dr Mark Wareing, Commercial Director of Pera, The Innovation Network, to find out his thoughts. Pera, known to many a global corporate as “the eyes and ears of the European tech world”, frequently pull together companies (both large and small) into consortia to solve technology challenges from its Europe-wide network of universities, industrial R&D departments, tech businesses and more. And often it becomes a member of the consortia itself as it has a large team of scientists based at its HQ in Melton Mowbray and elsewhere in Europe, who enjoy overcoming technology challenges — particularly turning “a bit of tech” into a commercially viable product.

Mark Wareing has had a long and distinguished career in technology. He obtained a 1st in Biochemistry as his first degree and then a doctorate in Medicinal Chemistry, before being appointed in due course to run part of what was to become Astra Zeneca’s R&D operations. From there he moved into electronics, ran several technology companies for others, started up and ran his own technology consultancy for a decade and, eventually, just over a year ago, landed at Pera as Commercial Director. Since then he has been spearheading Pera’s own commercial strategic review and implementation. He is a man who knows what he is talking about and can speak with authority from many angles.

The first thing Mark told us was that Open Innovation is a theme that more and more companies are engaging with, but he is seeing that each one will interpret it in a different way. Typically large corporates know that they have to innovate. They are also increasingly recognising that because their mainstream operations are focused on building and defending existing product lines, internal R&D effort tends to reflect this. As these companies dig themselves deeper and deeper in their own area of technological expertise it becomes harder than ever to see the “blue sky” elsewhere. Smart companies rapidly recognise that trying to develop innovative R&D in house could distract the scientists they employ from their “day job” and therefore it is essential to look outside for R&D innovation. (Indeed Pera itself knows this challenge as its own team of scientists are focused on working for clients and not on their own projects).

Increasingly, Mark told me, Pera’s clients and others are on the look out to partner with smaller, nimbler companies that have new technologies and business models which they can share. And Pera itself has identified that it too wants to pursue a similar strategy — partnering with smaller nimbler organisations which they can help to innovate.

All this is easy to say on paper, but as Mark pointed out, once in the real world the challenge becomes significant. If you are a large corporate where do you go to find the partners, how do you find the needle in the haystack and, once found, how do you use it to sew the right garments? Meanwhile if you are small, how do you access the right people in the big corporate machines effectively and in a timely manner? It’s these challenges that drive them towards the likes of Pera.

The number of companies approaching Pera each year have now grown into the hundreds “because we really are expert in linking the small companies with the big ones all over the world” Mark told me. “We know at least 50 R&D companies across Europe who want to get involved in partnering with others to innovate valuable, commercial products and within our wider network there are literally hundreds more.”

Although Pera does not specialise in biotech and pharma, its network does reach deep into medical technology, nano and other advanced materials, clean and green tech as well as informatics, coatings and polymer technologies. Pera is proud of its ability to know who is doing what and where in these areas on a global scale. Using this deep databank of knowledge it can see not only who is innovating, but also who wants to innovate openly. Then it is a simple step to draw people together on a project.

“We have built a very successful business ourselves, by creating a win:win situation for our clients and partners.” Mark told us. “For example, we discovered that we could make our own business grow by never trying to take ownership of the IP our scientists might have developed. All IP always resides with our clients and they pay us a fee to do work for them.”

I challenged Mark about the “inadvertent IP” that Pera scientists might create as a result of working on a client project, but not on client time. “If it is meant for a client it goes to a client” he said.

“But what about IP that is generated out of this?” I asked. “That is an issue that Pera regularly mulls over. If it is not created “on behalf of a client” then officially it resides with Pera. Occasionally one of our scientists has, with our blessing spun-out a business based on IP created in-house, but we don’t typically exploit it at the moment.

“Talking to you makes me think perhaps we should now try to adopt Open Innovation ourselves and go and find some partners who can help us to exploit our existing IP portfolio and perhaps even get some help on how to develop this strand of our business!”

Mark’s words were more profound than you might think. Pera is itself going through a major change. It has a successful core business of working with transnational consortia on technology development, particularly those which are financed by EU R&D funding programmes such as Framework 7.

It’s the head of the pack in this area, I am told, with a 4-5x greater chance of winning funding for its clients than its competitors. Indeed typically it pulls down £100m in R&D Funding from this source each year for its clients. But that world is changing and Pera knows it needs to adapt to stay on track.

It is innovating in terms of the services it offers and to whom it can offer them. Already this new strategy had led them into advising the Jordanian and Turkish governments on how to raise their innovative capacity. And the firm is rapidly building a serious training business for companies and teams of all sizes based out of its (rather beautiful) training centre in Oxfordshire. Who would have associated Pera with team building exercises involving building rafts out of barrels and rowing them across a lake in the old days? I certainly would not have, but that is now what’s on offer if you want it.

In the meantime the core business is still focused on creating wide ranging international consortia which have a common objective to develop and commercialise a technology, which will bring contract R&D work for Pera’s own scientists at their Melton Mowbray HQ, their labs in London and an increasing number of locations in Europe. The difference is that it is now building consortia that specifically are NOT looking to pull down EU funding to finance the projects, but will finance them from internal resources and or private investment. Pera is not well known and is certainly not well understood by the private equity world, but I suspect it is going to become increasingly important to them, as investors of all types look for quicker wins and better and more consistent returns on their tech portfolios.

Pera will increasingly be hanging out in the private equity, venture capital and business angel worlds, communicating its new offerings. Why, I asked Mark finally, should people who may or may not yet know them, engage right now?

“There are two reasons; 1. We know we have within our IP portfolio technologies that have extremely exciting commercial potential. I bet there are companies in angel and VC portfolios that could benefit from exploiting our IP; and 2. You only have to look at the massive rise in patent filings across the world, by corporates in the Indian sub continent and China especially vs companies in the West. These companies are no longer merely “passing off”, they are beginning to out-invent us. In the West, investors need to accept that this could become a Tsunami of registered and exploitable innovation that they might not be able to touch. We think that either they need to get investing internationally or they need to ensure their investees partner on a transnational scale. What we offer is both the expertise and the connections that can make this easier.”


To contact Mark email mark.wareing@pera.com or call +44 (0)1664 501501