THE IMPORTANCE OF R&D AND TECHNO PARKS FOR YOUNG ENTREPRENEURS

REMY RENAUDIN

National Project Coordinator, EUREKA, Paris

I am very honored to be here I would like to thank to Forum Istanbul organizers for a very efficient organization and I am very happy to be here and with the TUBITAK chairman where was said we have very strong relation. I will come back to that when I’ll be talking about EUREKA.

First I’d like to make a comment information, knowledge society, I have here with me a portable phone like most of you have, I have a French provider, this phone was most probably French company designed but it was most probably manufactured in China for instance, chip here inside and this chip is most likely designed in Korea. The thing is that I cannot use this phone here, why, because there is a stupid guy in my office that forgot to tell the French provider that I could get access to Turkish network communications so my phone is not ringing this is the information society. Actually I can live without it and also this stupid guy I am sure cannot get hold of me here and disturb me so I am quite happy and I can live with it. So information society is nice but let’s think about the user-friendly information society that is the most important thing. One word also on the knowledge society yes very nice idea very good, one thing we have to be very careful as users as knowledgeable people is that information is very important, it is very vast, it is a lot of information and we all know that too much information is killing the information and that’s also very very important that means that we will still need people teachers, educators to help young generation to go for the information they need and we all know that if you go on website all these companies are very proud that they can give you access 1.000, 2000 website but where is the information that you need, this is the most important thing in my opinion. I am going to talk about two things and I am here to give example, to give ideas and you will recognize from my honorable colleague there some of the words he said are also in my speech and we never met since about two hours ago.

First I’d like to speak about the French law on innovation and you may wonder why law? Yes because we are French and we like law obviously very much and law is something important because it gives a vision, it gives the political support and it gives a frame and that’s very important. In this law I would said and I will not go into details just to browse through all the different items that are in this law it is different kind of support and when I say support I mean funding, I mean public money, I mean political investment at government level and I will come back to that later. The first thing is the support of the new innovative technology business and one of the items is tax incentive for business venture on one side and also for new starters. Also support of the research and development companies that research tax credit and also another topic on that is the support for international cooperation and obviously I am thinking here of EUREKA and I’ll tell you few words about it later on. Third, the support for technology transfer that is mainly for researchers and we suffer in France like in some European countries that the work of researchers is not used by industry, it doesn’t go to business, it is very nice to have a lot of patents, it is paper, it is very costly and there is very big discussion going on in the EU that European patent is very costly but if it stays there on the table then it is money lost. Those patents have to be used by companies and it is not easy to have the bridge between the research and the companies to go for the market because what we are talking about, we are talking about business, we are talking about profit, we are talking about markets. Obviously for researchers the frame especially for the patents is very very important and you may wonder why living in France this whole discussion took place, why have we not been taught of this well mainly because of the structures and it is very difficult sometimes the existing structure to make people change their mind, their way, they’ve been working until now and this needs time so just as a synthesis of the support it is tax incentive, it is to encourage the mobility of the researchers towards industry, the mobility of researchers is very important. Now we are in France that means that it was not possible before that the researchers allowed creating a company, they can be advisors to existing companies, they can become a member of a board in a company and they can also take acquity in a company. That means now that this is now coming into force with the law and this was not possible before. Since the year 2000, 400 French scientists has been agreed, there has been an agreement so they can do all these things. 400 you may say that is not much but it is a long progress and time is very very important.

The creation of innovative companies is also very important and I’ll give you just one example, we have a national contest in France with money and you will see that money is important it is all over my speech, it is 14 billion Euro a year of prices so it is not just the middle, it is money for young companies, it is very important and this money can go to 6000 Euro for one company which for a small company this is quite a lot. Since this national contest was set up there has been 1200 selected projects. 600 companies has been set up and 3000 jobs created. These are you may say impressive figures, I don’t know how those 600 companies will do in 5 years time and this is the major difficulty obviously.

If I go on summarizing and to give you some more figures we have in France only 30 operating incubators. We have 1000 projects in incubation that means 600 companies and 2000 jobs. But still and this was stressed by my colleagues still we are missing one thing and we still have to work on one thing, these are the links with those companies with the venture capitalists and this is still pending in France and it is still difficult, still needs some work. For young innovative companies there are two measures I wanted to mention, it’s the exemption of social security employer contribution for researchers that are employed, this should also be placed into the discussion or into topic of brain drain, how do you keep your researchers here in Europe? Well certainly by trying to diminish the labor cost but also to give opportunities to those researchers not that they will be in a research lab all their lives but tomorrow they may create their companies that is to give them a vision, to give them a little dream. As for the company there are tax exemptions for the first 3 years and then a 50% reduction for the next 2 years. These are indirect elements but I think that they are to be seen as a government investment in research and innovation, from research development and to industrial innovation. This is a real investment and that has to be done on the long range, it is definitely not one shot.

In conclusion of this frame, I think the biggest challenge is bridge between research and industry. This is definitely the challenge and it is also not easy to tell one day to researcher, ‘well you can go out of your university and your lab and create a company’ this is also something to do with education we still need the best researchers, the more creative ones but they also need to be trained in management and finance and in human resources and also market analysis because it is nothing to have a very nice product but if you don’t sell it then it is all lost and it is not lost only for the inventor but it is also lost for the people who are working in the company and we should never forget that.

These are all the measures we are taking and the last one is European and international exposure and this was also said that for those young companies they need this European exposure at the first level and this is where EUREKA comes in. EUREKA was born 20 years ago; it is an intergovernmental initiative and agreement between governments and supports high technology companies large or small to develop new products, new processes, and new services for the civilian market. The main idea is that it is that industry decides, I want to work on this topic, I want to work like this and I want to work with this partner because he is the best and obviously the other side of this medal of this cooperation is that you have to share the risks but also to share the results and this is not sometimes easy to understand. So globally the goal is to strengthen the European competitiveness and to encourage world-class products and companies. It needs also support, they say you need to be rich to support the research, I would say you need to make choices, why, because research and innovation it is costly, it is risky, there is a lot of competition and most of the world-class innovation today they have been brought by the gross competencies, people from physics, chemists, environment, designers all these mixture, different competencies has brought the major innovation today and this is very important and you need incentive to bring those people together.

I would like to give you two examples of what have been achieved by European cooperation. First I will start by a failure because it doesn’t always succeed, in the 70’s there were companies in France, Germany, UK and Italy trying to design in their own corners computers, this is what I call the lost computer battle. Today some of those companies they have disappeared completely and some others are doing other things but the thing is that no computer today is done, manufactured, designed and invented in Europe it is a lost battle. Another example about in microelectronic sector, there has been two factors, first there has been willingness of European companies to work together, competitors coming to government and saying we cannot do it alone it is too expensive we need to work together, is your government ready to help us, the answers of those governments where the response of the governments were yes we will support you, this was 1988 and since then those governments have been supporting those companies, in France on an average it is 100 billion Euros per year and we are now in 2005 and those companies still need the help. In 1988 there was no company in microelectronic sector, no company in top 10 companies in the world. Today there are three and INFINIO, PHILIPS, ST MICROELECTRONICS but it is a constant work, it is a long range and it needs as I mentioned in France quite a lot of efforts.

What is EUREKA today, it might sound very small to you but it is on average 200 projects a year for 500 million Euros, we have 600 running projects involving 3000 participants and 1200 are SME’s and this is may be where we require the most attention for SME’s to help them to cooperate in Europe and I am also very proud to be here, I am at the moment working with my colleagues at TUBITAK and in ANWAR who is agency for SME’s supporting innovation in France, we are working on a project between a French company and a Turkish company involving also 2 Turkish Universities, we hope to be successful in the evaluation and to give this project a EUREKA label in June. You may say it is only one, it is because Turkey is far away and there are a lot of work to be done in France to make my companies in France aware that there are competencies they may find in Turkey and the same also in Turkey to say, look why don’t you go to France and find some companies or in Europe, this will also need a lot of effort.

To conclude I’d like to repeat and this has been said, the support to innovation from beginning of the idea to the product, it is the global approach, you cannot miss one of the item, all of them have to be supported from education, researchers, industry, companies, people is very important and I would like to stress again and it is not easy, the link between private and public sector. Time is also important and it is something which is always very difficult to make politicians to understand whether they are in Turkey, in France, in Germany, time is important it is not a one shot, it is continuous effort for years it is like when you plant a tree from the seed and the day after you cannot expect to eat the fruit. Second point, choices have to be made, choices on where the government put their money first, it is not easy, choices also to be made when you are going to fund the project, which project, which company, which incubator are you going to fund and those choices are not easy to make and this is may be one of the problems we have in France to make choices. I would like to quote a French novelist Balsac, he said to be able to choose is a proof of intelligence and I hope that you have no hesitation in approving this assumption.

Two other things very quickly, evaluation is needed for the companies to draw the lessons, for politicians and also for the citizens and last but not least make it simple, make it visible, make it easy to work for your clients, for companies, for politicians and for citizens, easy is the best way to reach bonus. Thank you very much

Question (Gül Turan):İki küçük sorum olacaktı, bir tanesi sayın Lalkaka’ya, I can see from your CV that you have been involved in various projects in Turkey and what I was wondering is whether this involvement would continue and help us plan in formulating for those 100 incubators that you were discussing? The other question was to Mr. Renaudin who also affiliated with AWWAR and I also see that France is a very bureaucratic country like Turkey and what I was wondering was what do the private sector thinks about AWWAR and what are the criticisms that are put to it? Thank you.

Yes I could speak for ours about bureaucracy but this is not the topic today. I will give you one or two examples because obviously bureaucracy is not the ideal surrounding when we are trying to involve private sector with private money. First of all in AWWAR our clients are SME’s, if we want to provide them good service we have to be very near to them so we have 22 offices all around France that means that in fact if I look back 10 years ago the’s always been 500 people in AWWAR, the only thing is that there are less and less in the headquarters in Paris and more and more in the offices so that’s kind of nice way to reduce the bureaucracy, the less people you have may be they add less bureaucracy, it is not easy obviously because you do not move people who like Paris to go in Toulouse, Marseilles or Lyon and sometimes it is difficult. Regarding the public sector we have in AWWAR a kind of label where we give a label to a company that means that we have been assessing the technology, we have been assessing the management capacity, the financial capacity and the market access for this company and this label allows public and private investors to put money into the company. One thing has to be mentioned and I’ve had very nice dinner yesterday with Turkish bankers and either in Turkey or in France but all over the world bankers, they give money only to rich people and obviously when you are going to bank, they say look those people are poor they don’t have enough money to set up their company and on top of that they are working in innovation, they’re risky isn’t going to be built up, are you going to be successful in terms of technology and on top of that are you going to sell so if you say this to a banker, he just will run away so you have to have strong links with those people tell them that your expertise is and we are sometimes wrong but most of our expertise are good expertise, they are good recommendation for those people to invest money in innovation my colleague in France working on project just on national bases, just a project for a company when they meet me they tell me oh you are the guy with deadly cocktail because in my job we not only have young companies, we have young entrepreneurs, we have new technology but we add corporation with other companies and they call this the deadly cocktail, obviously we made a survey in AWWAR to find out whether it was more risky if we are working at national level or international level and the difference is very very minor. In other words you are not less and not more successful whether you work on an internal surrounding or whether you are getting exposed to the European market, obviously one thing that should be mentioned is that if you are already on the European cooperation you have access to a European market and not only a national or sometimes even a regional market and then this keeps those private companies banking capital risk the potentiality to multiply their fund by 10, 20 which they dream of this is why they are here, it is not that they give one and they will refund one, no if they give one they want at least 10 and most probably 20 and this has to be also mentioned.