Arya's Corner : Recent Publications

2009-03-20T02:12:00.000-07:00

Entrepreneurship on S&T

I am taking a seminar with the Human Resource Development Centre (HRDC) of the CSIR at Gazhiabad next week. This seminar will be primariliy to interact with a group of technocrats from Mangolia. HRDC is providing a training service on Research and Development. My part is to discuss with them about S&T Entrepreneurship. In this connection I was asked to preapre a short study material on the subject. Here it is:

An Essay on Entrepreneurship
Dr AK Sengupta
Senior Consultant, Consulting Engineering Services (India) Limited
Formerly Professor, International Management Institute, New Delhi

How does one define the term “Entrepreneurship”? One of the most useful definitions, from the points of view of an economist, is as follows:

Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses, generally in response to identified opportunities. It can be defined as a creative human act involving mobilization of resources from one level of productive use to a higher level.

An entrepreneur is therefore someone who is an action oriented person with unusual foresight to recognize potential demand for goods and services. He/she has the ability to conceive novel applications from available resources, and to transform existing or latent demand into supply. Entrepreneurs are truly change agents who influence society by creating new enterprises, and at the same time get influenced by society to recognize its needs and fulfill such needs by astute management of resources.

According to Joseph Schumpeter, the Nobel Prize winning economists of early 20th century, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. He/she often brings about “creative destruction” across markets and industries, whereby established ways of doing things are destroyed by creating new and better ways of getting things done and new products and business models come into being. Entrepreneurs are essentially innovators, who through new and unusual combination of resources and methods of commerce satisfy customer wants and generate wealth, profit or societal good. They are achievement oriented individuals driven to seek new challenges and new accomplishments, and often are the engines of industrial growth. They are people who start new ventures with a vision of growth, seek constructive change, have the persistence to gather essential resources require and to overcome obstacles, and use their energy to achieve unusual results. One can make a long list of “traits’ or characteristics associated with entrepreneurship. Entrepreneurs are called “risk takers” (not gamblers), high achievers, (“failures” do not deter them), persistent innovators, dynamic leaders, and inspired energetic single-minded passionate individuals. According to Peter Drucker, the management guru, entrepreneurship is primarily about taking calculated risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.

The human civilization has reached where it is today because of the contributions from millions of entrepreneurs who lived throughout the ages in all parts of the world. The earliest reference to entrepreneurial spirit can perhaps be traced back to circa 10000 BC when hunter gatherers got transformed into “agriculturist” communities. The early civilization in India or China thrived surely by the inspired leadership of artisans, farmers and trader. The European renaissance in the middle ages owes a lot to entrepreneurial activities of the artists, scientists and explores. The rapid industrialization in the nineteenth and twentieth century in Europe or Americas would not have happened without the unstoppable “never-say-die” spirit of the entrepreneurs in the farmlands, factories, universities, and scientific and business establishments in these countries.

The phenomenon of entrepreneurship has however not been monopolized in only a few countries. Across the globe growing number of people are realizing dreams of owning and operating their own enterprises. These businesses have been introducing innovative products and services, pushed back technological frontiers, created new jobs and employment, opened up markets (domestic as well as foreign), and in the process provided their founders with the opportunities to do what they enjoy most.

The interest in entrepreneurship has never been higher than it is now, at the beginning of the twenty first century. According to a recent survey, nearly 18% of adult Indians, 12% of adult Chinese and 11% of Americans are working towards starting their own enterprise/business or are already self employed and involved in some entrepreneurial activity. Fuelled by the downsizing trend among large corporations during the last few decades of the 20th century, there has been a surge of global entrepreneurship. Even thirty years ago, competitive conditions in the market place favored large organizations with complex hierarchy and layers of management. But advances in technology and knowledge led to conditions that demanded higher productivity from the capital employed, and companies had to shed manpower and improve efficiency. However, the same technological advancement also made it possible to create small companies that can cope with the pace of change, exploit market opportunities, adapt and adjust to new and modern technologies, and operate with competitive advantage. How do the small companies compete against giant corporations? According to a Harvard Chair Professor of Entrepreneurship, the answer is “because while the large corporations are studying the consequences, the entrepreneurs are jumping in and changing the world”.

The surge of entrepreneurial activity is demonstrated by the growth of small and medium sector enterprises (SMEs) across the world. In the USA, it is estimated that between 3 and 4 million new businesses are started every year. In India there are more than 12 million small businesses in operation that contribute to more than 40% of the nation’s Gross National Income (GNI). A large majority of these enterprises are based in the realm of Science and Technology (S&T). The march of S&T started in the nineteenth century in Europe, rapidly progressed in the post second world war era and got accelerated in the post 1970 decade in the myriad fields of manufacturing, mining and metallurgy, chemical engineering, biological an medical sciences, computer sciences, communication technologies and so forth. Many corporations that are industry giants today began very modestly as entrepreneurial ventures by individuals engaged in these S&T fields. To cite a few examples, Intel Corporation in Micro-electronics, Sun Micro-systems in electronic workstations, and Microsoft in software all began as start up companies in America. Similarly, in India we have examples of successful companies like Reliance Industries, WIPRO, Infosys, and Biocon. Many new fields of S&T which made debut only a few years ago, like bio-informatics, genetic engineering, 3G mobile communication, have already matured to a great extent and businesses worth billions of dollars have got established. As the S&T sophistication gets enhanced, opening up possibilities of newer technology innovations, the customer expectation and demands also are expanding, and consequently market opportunities emerge for starting new start ups.

All entrepreneurial endevours begins with an innovative idea which may be conceived at the workplace, out of experience, or observing and identifying a societal want, or through research and development efforts in laboratories, or university/college. Entrepreneurship is about translating the creative idea into a useful application, through a process of nurturing, developing, rationalizing, planning, implementing and finally commercializing (bringing it into reality for people or customers to accept). This is the innovation path all entrepreneurs have to traverse. For science and technology entrepreneurs, this process can often be facilitated in Incubators located in academic or scientific institutions, especially for the first generation S&T entrepreneurs, through providing initial working space, mentoring support from experts, networking, seed finance and so forth. Such Incubators have become quite common during the last twenty years or so in the United States, Europe, China, India and many other developed and developing countries.

Not all entrepreneurial initiatives aim only at generating wealth and profits for the individual promoters. Apart from commercial enterprises and independent businesses, there are two other categories of entrepreneurship, namely corporate entrepreneurship and social entrepreneurship. Corporate Entrepreneurship is concerned with those employees of an established corporation who exhibit spirit of entrepreneurship while engaged with specific tasks and responsibilities in the corporation. Corporate entrepreneurs, also known as Intrapreneurs, are those creative employees who combine the resources of the corporation in unusual ways to create innovative new products or services. An Intrapreneur has a knack to identify business opportunity before anybody else within or outside the corporation does, and often has the knowledge or skills to get things moving. He/she not only helps the company to become more productive and / or to introduce new products or services, and in the process ensures increased business and profits, it often leads to generating new divisions, subsidiaries or even new “spin off” companies outside the parent organization. It is very important for the management of companies to identify, encourage and nurture such intrapreneurs among their employees.

Social entrepreneurship involves application of entrepreneurial skills for the public good rather than for private profit, and using imagination to identify new opportunities and determination to bring them to fruition. This term is used to describe forms of activity and people who are socially innovative, or 'enterprising' in the non-economic sense of the word. Hence, the label 'social entrepreneur' has come to apply to any individual seeking to effect social change through creative and innovative ways. Some well known and universally respected social entrepreneurs are Vinoba Bhave (Founder of the “Bhoodan” Movement in India), Mary Montessori (who developed new approach to child education), Mother Theresa (founder of the Missionaries of Charity), Florence Nightingale (who propagated the modern concept of nursing), Mohammad Yunus (Founder of “Grameen” Bank in Bangladesh and proponent of Micro-credit) and Verghese Kurien (the first CEO of AMUL Milk Project and promoter of the White Revolution in India).

Presently the world is passing through an era of great global depression, when older big corporations are contracting, and people in large numbers are finding themselves out of employment. This also is the time for the spirit of entrepreneurship to flower. With advancement of internet technologies and e-commerce, and prospect of large investment in environment friendly energy sources, infrastructure, education and health sector industries in most countries, extensive scope for entrepreneurial opportunities are also likely to open up. It has been said that the next wave of growth and prosperity in the world will come about on the shoulders of entrepreneurs around the world, both in developed and developing nations.

References

David H Holt, Entrepreneurship: New Venture Creation, Prentice Hall India, 2007
Kaplan, Patterns of Entrepreneurship, Wiley & Sons, 2001
Zimmerer & Scarborough, Essentials of entrepreneurship and small business management, Prentice Hall, India,2006
Joseph Schumpeter, Capitalism, Socialism, and Democracy, 3rd edition, Harper and Row, New York, 1950
Peter Drucker, "Entrepreneurship in Business Enterprise", Journal of Business Policy, vol 1, 1970.

2009-02-17T02:07:00.000-08:00

Case Study of an Industry Academia Interface:
The FITT Story
Arya Kumar Sengupta, PhD*

Abstract

Developing a close interactive relationship with the external world, particularly the industry at large, is a necessary imperative for a technical university, in order to ensure relevance of the academic curricula and research as well as to generate internal resources for undertaking R&D programmes in new advanced high technology areas, upgradation of infrastructure, and induct, retain and reward high quality members of the faculty. In this regard, the role of the autonomous industry interface institutions and Technology Transfer Organizations (TTO) is of great importance. In this article the evolution of an Indian TTO has been described on the basis of the activities and performance during the first ten years of its existence in the form of a case study. Later, the concept of transformation of the technical university into a Technology Enterprise has been briefly elaborated, and the potential role of the TTO in this transformation process discussed.

___________________________________________________________________
Dr AK Sengupta was until recently a Professor with the International Management Institute (IMI). He was previously the Managing Director of Foundation for Innovation & Technology Transfer (FITT) at IIT Delhi. The views, comments and conclusions expressed in this paper do not necessarily represent those of FITT, IIT Delhi and /or IMI. Author can be contacted on email address aryaseng@hotmail.com
This case study on FITT covers only the first ten years of the organisation

Dated: February 11, 2008

Preamble

It was late in the afternoon on a day in March 2003. The Managing Director (MD) of the Foundation for Innovation and Technology Transfer (FITT), the autonomous industry interface organization of the Indian Institute of Technology, Delhi (IITD), one of the premier academic institutions of India, walked back to his office in a pensive mood. He had just attended a fairly intense meeting of the Governing Council (GC) of FITT. MD reported a steady performance of his organization during the last financial year, but he had to admit to the GC that the revenue of FITT had not grown during the last couple of years. (See Exhibit 1)

FITT has been in existence for more than ten years. In the initial few years, FITT had created quite an excitement among the academic community in the Institute by providing a friendly, focused, facilitative, as well as a non-bureaucratic platform for interfacing with the external stake-holding world such as the industry, and in the process helping to achieve a quantum increase in extra-mural revenue for the Institute as well as the faculty members involved. FITT had taken a number of initiatives for promoting a Technology culture, through institutionalizing activities such as technology transfer, industry related training and continuing education programme, collaborative R&D projects with industry aimed at Technology Development, problem solving consultancy, safeguarding of intellectual property rights (IPR) etc. Such activities had been stagnating in the Institute in the past, as there had been more thrust on the development of technical manpower (students) through under-graduate (UG) and post-graduate (PG) teaching and fundamental research. An Industrial Research and Development (IRD) unit had been functioning in the Institute for nearly twenty years prior to the setting up of FITT in 1993. IRD, however, worked more like a department of the Institute, and was mired by rules, regulations and procedures that often hindered rather than encouraged interaction with Industry. As FITT framed its own rules and functioning style and began to create impact among the academic community of the Institute and the external stake-holders, IRD woke up from its slumber and simplified many of its own regulations. The two organizations, FITT and IRD, have been in operation parallelly in the Institute, one (FITT) as a separate autonomous organization and the other (IRD) as an integral part of the Institute. In spite of the fact that it was clearly easier to operate under the umbrella of FITT because of vastly simplified procedural hassles, many faculty members often tend to prefer taking their industry projects to IRD, even when the origination of the projects could be attributed to the promotional and facilitative supports of FITT. Consequently, even though the total value of the industry related projects in the Institute could be seen to be growing significantly every year, the share of FITT did not rise proportionately, specially in the last couple of years. A large number of projects were getting conducted under the aegis of IRD.

The questions that were mooted by some members of the GC were related to the efficacy, or even, utility of having in the same Institute two separate organizations, FITT and IRD, that appeared to be engaged in functions which often look broadly similar in character. The fact is, the scope of enlarging the industry interactions is enormous, and IIT Delhi has not achieved even the tip of the iceberg that represents the huge opportunity in the globalised free market and competition. How should the two entities be worked as organizations complementary to each other, and their resources utilized optimally by the Institute and the academic community, so that the level of the industry-academia interactions gets enhanced steadily in line with the demands of rapid economic growth of the country at large? Should FITT retain its separate independent identity with a clear mandate of its own, and continue to expand its range of activities and revenue in order to maintain and enhance its unique self-sustaining character of a single window service provider to both the academics and industry stake-holders? Alternatively, should FITT and IRD be merged into one body?

Historical Background

The concept of the Indian Institutes of Technology (IIT) was first introduced as a result of a report submitted in the year 1945, before India became independent in 1947, by Professor N.M.Sircar, the then member of Education in Viceroy’s Executive Council. The mission of the IITs was to bolster the efforts of a newly independent nation to industrialize rapidly and enhance the nation’s capability to train manpower of international caliber and excellence in the area of Science and Technology. Following up on Sircar’s recommendations, the first Indian Institute of Technology (IIT) was established at Kharagpur in 1950. In his report, Professor Sircar had also recommended that such Institutes should be started in different parts of the country. The IIT at Delhi, the fifth institution in its genre, came into being in the early 1960s. It was originally started as a College of Engineering and Technology in 1961 with the help of the U.K. Government and the Federation of British Industries in London. It was later declared an Institution of National Importance under the “Institute of Technology (Amendment) Act 1963” and was renamed “Indian Institute of Technology Delhi”, and accorded the status of a University with powers to decide its own academic policy, to conduct its own examinations, and to award its own degrees. In line with the practice in the four other IITs already in operation (at Kharagpur, Kanpur, Madras and Bombay),* a high powered Board of Governors (BOG) was constituted for IIT Delhi, which was given the responsibility of overall administration of the Institute. For inter coordination among the five IITs, an IIT Council chaired by the Minister of Education (later re christened as Human Resource Development) in the central government was also set up, which had all the Directors of the IITs as members along with a number of other academicians of national and international eminence.

Over the years the IIT trained engineers and technologists have proved their mettle, not only in India but also in the world at large, and their world class competence has been very well established. From the very beginning, development of interactive relationship with industry has been given considerable importance in all the IITs, even though the primary thrust has been towards ensuring its credentials as a world class academic institution, at par with other globally renowned universities. For example, the primary

*Note: By 2000, two more IITs came into being – at Roorki in Uttarakhand, and at Guwahati in Assam. In 2008 the Government of India initiated actions to set up eight more IITs in different parts of the country.

objectives laid down by the Government in 1963 for IIT Delhi were to a) offer instructions in Applied Sciences and Engineering at a level comparable to the very best anywhere in the world, and b) to provide adequate facilities to post-graduate studies and research to meet the needs of specialised research workers and teachers in the country. In 1970, a Review Committee examined the progress made in IIT Delhi, and based on its recommendation the objectives were further expanded, among others, to : c) developing close collaboration with industry through exchange of personnel and to undertake consultancy projects, d) anticipating the technological needs for India and to plan and prepare to cater to them, and e) developing continuing education programmes (for the benefit of faculty development as well as for people working in Industry). Subsequently, the Industrial Research & Development Unit (IRD) was set up in the year 1975 to coordinate the activities of sponsored research and industrial consultancy and to strive to provide the best possible service to the industry and academia. The assigned functions of the IRD Unit included assisting and monitoring of:

i) Sponsored Research Projects;
ii) Consultancy jobs;
iii) Patents and Transfer of know-how;
iv) Foreign collaboration with Universities and/or Research Institutions;
v) Collaboration with Institutions and Industry in India;
vi) Operation of scheme of Summer Undergraduate Research Aware (SURA);
vii) Operation of Innovation Award Scheme (IAS)

IRD was also responsible for providing total administrative support and guidance in respect to contract negotiations, patent applications, management of research and development funds, purchase of project equipment etc. A separate Continuing Education Programme (CEP) cell was also established to administer the short training courses floated by faculty members or departments of the Institute, and the Quality Improvement Programme (QIP), a scheme funded by the Ministry of Human Resource Development

(MHRD) of the Government of India to provide opportunities to do PhD Research by technical teachers in various universities and collages of India.

The IRD unit has been traditionally led by Dean (IRD), supported by one Manager and a team of administrative staff. A senior faculty member is given the additional charge of Dean (IRD), on a rotational basis. This is clearly a part time assignment for the faculty concerned as he/she is expected to continue discharging his/her academic commitments like teaching courses and guiding research for post graduate students or externally funded research programmes. Similarly another senior faculty looks after the CEP cell, reporting to Dean (IRD). Both IRD and CEP were operated in accordance with the overall rules and guidelines applicable to the functioning of the Institute and the Standard Operating Practices (SOP) of the Government.

The strength of IIT Delhi lies in its 450 faculty members having expertise in their specific areas, the combination of which covers almost every facet of science, engineering and technology. It has 13 departments and 10 centres, and each department and centre are well equipped with required expertise by way of faculty and laboratories and other facilities. At a moment of time, there are around 1500 undergraduate students, another 1000 post graduate and research students, and some 1000 other research staff associated with the Institute.

The Origination of FITT and the formative years

A second review of the working of the IITs was taken up in 1985. The committee submitted its report to the Government in 1986. The report specifically commented on the generally low level of interaction between the Industry and the Institutes. It was believed that in spite of the substantial R&D activities undertaken in the Institute, there had been very little technical fall out of these efforts in Industry at large, and negligible commercial returns there from. The causes behind this state of affairs were primarily the following:

Lack of adequate communication between the Industry and the Institute, thereby leading to inadequate appreciation of each other's needs and constraints.
Lack of an interface to translate R&D outputs into commercial products and processes.
Difference in work ethos and perceptions regarding time frames and cost of R&D between the industry and the academicians.
Inadequate guidance by the industry to the Institute regarding the real strategic and relevant needs for channelising the academic R&D towards commercial solutions, and
Bureaucratic constraints, in the form of rules, regulations and procedures, under which the existing Industrial Research and Development Division had to operate.

The key recommendation of the Review Committee (1986) in this respect was the following:
An industrial foundation independent in its normal day to functions may be set up in each IIT. It should work as a commercial corporate body with its own budget and plan for marketing its research and consultancy activity.........

The Foundation will
n Engage in and bid for relevant research in Industry
n Cooperate with R&D organizations in Industry and Government Departments
n Act as a clearing house for consultancy services for industry problems, and
n Assist in Continuing Education Programmes.

The Government of India broadly accepted the Review Committee recommendation and identified IIT Delhi as the first IIT where such a foundation would be created, for which the Institute was to be provided with a corpus fund of up to Rs 30 millions. Accordingly the BOG of IIT Delhi constituted a group of senior faculty members to prepare a concept paper which was presented in 1991 and approved. A Memorandum of Association (MOA) required for registering the Foundation as a Society was drafted in 1992. The then Deputy Director of IIT Delhi was chosen as the first Managing Director of the Foundation, on a part-time appointment. The salient features of the Concept Paper and the MOA are given below.

• The Foundation will be named Foundation for Innovation and Technology Transfer (FITT).
• FITT will be set up as an autonomous technology development interface closely linked with the Institute with a view to achieving a quantum jump in interaction with industry without compromising the primary goals and objectives of the Institute.
• FITT will be registered as a non profit making Society
• FITT will adopt an industrial culture and ethos in its functioning
• FITT will use IIT Delhi (expertise and infrastructure) as its primary resource base
• FITT will have a minimum of own fixed assets and a minimum number core professional staff.
• Financially FITT will be independent of IIT Delhi and will not pass on its financial liabilities to the Institute.

FITT became a Registered Society in July, 1992. The same year the incumbent MD moved on to take up the responsibility of Director of one of the other IITs ( at Kanpur). FITT remained more or less in suspended animation until a new MD got selected and joined in May 1993 on a full time basis. The new MD had more than twenty years of management experience in industry and had previously worked in senior positions in the R&D Centre and later, in the Corporate Planning Division of a large public sector undertaking in India. Meanwhile IIT Delhi received a total of Rs 16.2 million as corpus fund, in two tranches, one in 1992 and other in 1993. In 1995, FITT was recognised as a Scientific and Research Organisation (SIRO) by the Ministry of Science and Technology of the Government of India.

Autonomous Industry Academia Interface Organisations Abroad : Some Alternate Models

Many Technology Institutes and Universities abroad, especially in developed countries such as USA, UK, Australia, other European nations, Japan, China etc. have been operating industry interface organizations that are effectively independent, administratively and financially, of the parent institutes. Some of these organizations have been designed as a Company, fully or partly owned by the concerned university/institute, while many others function as a Foundation or a non-profit making body whose surplus operational income is ploughed back to promote its own activities or
those of the parent institution. Such a Company or a Foundation is free to frame its own rules and regulations, can operate on a commercial basis freely competing for assignments from industry with any other commercial entity or agency, and can retain any “surplus”. These organizations are manned by a core group of professionals (or technocrats) who devote 100% of their time to duties assigned, without any encumbrance of teaching or research commitments per se. For such an organization, industry firms are the “Clients”, and the faculty members, scientists and the infrastructural facilities of the parent institution are the resources to be tapped and gainfully utilized. Thus it has to look after the interests of both with equal alacrity and devotion.

One of the earliest known industry interface organizations is the Foundation for Scientific and Industrial Research (SINTEF) in Norway, which was set up in 1950, almost immediately after the end of the Second World War, to facilitate technological rehabilitation of that country. SINTEF was linked with the Norwegian Institute of Technology (NTH) in Trondheim as well as the University of Oslo. In 2004, its turnover had touched $ 20 million.

Until the advent of the second oil shock in the late 1970s, the universities in the USA remained fairly disconnected with industry and commerce. But after the passing of the famous “Bayh-Dole” Patent and Trademark Law Amendment Act in 1980, many US universities decided to aggressively work with the industry at large to generate resources through transfer of technologies developed in the academic research efforts and through other mechanisms of knowledge transfer. Over the last 25 years, almost all major technological universities in the USA set up Technology Transfer Organisations (TTO). The Bayh-Dole Act provided the legal basis for TTO funding. The Act states that income recorded from commercialization of Government-funded research results can be utilized for three purposes: (1) to fund the administration of the technology transfer function (TTO); (2) to provide a share of income to the inventor as an incentive to participate in technology transfer; and (3) to support education and further R&D in the institution. TTOs are expected to become self- supportive from such allocation of income and/or from other related income-generating services. One of the first TTOs in the USA was the one at Stanford University (known as Stanford University Office of Technology Licensing), which was initiated in 1970. In the first ten years its total income was $4 m, but in the next ten years after Bayh-Dole act came into being its total income exceeded $ 40m, and since 1990 it has crossed $ 500 m.

Similar industry interface organizations have come up in most British Universities. The Salford University Industrial Centre Limited was set up in 1982 as a public limited company wholly owned by the University of Salford near Manchester. By 1987 it was doing business worth $ 10 m. The other major university across the city, UMIST (University of Manchester Institute of Science and Technology) set up the UMIST Ventures Limited in 1988, and when the UMIST and the Victoria University of Manchester merged in 2002, it was rechristened as the University of Manchester Intellectual Property Limited (UMIPL). In Australia, there were in 1995 more than 20 universities which have similar TTO like interface organizations, such as the one at the University of Wollongong, known as the Illawara Technology Corporation Limited, founded in 1981.

In these interface organizations, the primary areas of activity range from collaborative R&D programmes, IPR servicing, Technology Transfer, industrial consultancy, training and continuing education, development support to lab proven technologies having good potential for commercialization, and specialty services (eg. Quality Assurance Certification), to technology business incubation and support to entrepreneurs.

The concept paper and the MOA for Society registration of FITT were drawn up incorporating many of the characteristic parameters from the different models for industry academia interface institutions functioning in various parts of the world.

Mission, objectives and functions of FITT

When the present MD took over the reins of FITT in May 1993, his first task was to chalk out the differentiation his organization needed to bring about in the Institute vis-à-vis the then IRD unit. He had extensive deliberations with all the primary stake holders, namely the Institute faculty members, alumni groups, current students and researchers, leaders of industry and industry associations, experts from Government agencies and R&D organizations, and the newly inducted core professionals of FITT. The following Mission and Objective statements were laid down.

Mission Statement
To be an effective interface with the industry to foster, promote and sustain commercialization of S&T in the Institute for mutual benefits

Objectives
• To proactively market the intellectual ware of IIT Delhi to industry.
• To offer a flexible mechanism and a single window service (to the industry clients) for making use of the expertise and infrastructure of the institute and capabilities/technologies developed at the institute.
• To provide (to the faculty) an effective interface with industry, a congenial platform and a facilitative environment for collaborative work assignments.
• To augment IIT Delhi’s resource generation efforts.

It was patently clear from the beginning that FITT had two sets of customers, the academic members of staff, and the clients from industry and elsewhere. Both these groups needed an organization that provided a platform for facilitative, flexible, friendly and focused environment for fruitful mutual interaction between them. It was to be stressed that FITT would have to operate like a commercial organisation and therefore adopt a commercial ethos in its functioning. It was to have a minimum of its own fixed assets in terms of buildings and equipment. It would draw upon the facilities and expertise of IIT Delhi as the primary resource and supplement it with the expertise of other IITs, R&D Organisations, Consulting Engineers, Design and Fabricating agencies etc. to serve the industry and other user organisations. The core staff strength of FITT would be lean and yet have to provide efficient support functions for effective project management. In order to fulfill the above obligations, FITT planned to empower the coordinators and principal consultants of its projects (who would normally be from the members of academic staff of IIT Delhi) with a great deal of freedom and flexibility in their day-to-day functioning, for which the relationship between the faculty and FITT staff required to be one of mutual trust an good faith, in a climate of cooperation, support and concern for each other.

The principal functions of FITT were, first, to perform as a Marketing Arm for the technological capabilities of IIT Delhi, through promotional campaigns in the external world, and second, to provide the project management support to the faculty. These functions, vis-à-vis the faculty members can be summarized in the following manner.

> Pre-Program Stage
• Marketing of IITD expertise to Externals
• Connecting faculty with industry
• Assistance in Formulation of Proposals
– Negotiation of terms of agreements
– Drafting of Contract

> During Program Execution
– Provide Logistical Support to principal investigator/consultant
Ü Communication Ü Purchase Ü Import
Ü Tax exemptions/concession Ü Legal issues
Ü Other administrative support

> Financial Management
• Invoicing, Book Keeping
• Disbursal of payments
• Monitoring, Review & Interaction with clients

> Post-Project stage
• Dissemination of information
• Assist on IPR matters

The new MD brought in a style of management in FITT that was pretty novel and, to a great extent, revolutionary in the IIT system in 1993. First, a core group of five professional executives were recruited, each of them being academically and experience wise as qualified as most of the faculty members of the Institute. Each of the executives (designated as Executive Consultants) were assigned a specific functional area, namely, Marketing & Business Development, Technology Transfer & IPR management, HRD & Training Programmes, Information Services, and Establishment, Finance and Administration, in a matrix type organisation structure (see Exhibit 2). A minimal number of support staff was also appointed. They were all accommodated in an open office environment located in the Institute Deans’ complex. Even the MD was seated in the open office, albeit in a glass enclosure thought necessary for confidential discussions that were required at times. Every member of FITT was available all the time for interaction with IIT Delhi faculty members, scientists and students, as well as the visitors from outside. State of the art communication system, in the form of telephone, desk top personal computers and internet connectivity, was installed in the office. Separate halls were created for conferencing and syndicate discussions. The rules, regulations and procedural formalities were simplified for effective and speedy actions, and flexibility. Two committees were constituted by the FITT Governing Council in order to assist FITT in policy decisions and project selection, namely the Consultative Committee and the Standing Committee composed of very senior faculty and industry representatives. The faculty coordinator and consultants in charge of industry projects in FITT were empowered with freedom to carry out the job in their own style, within the budgetary constraints and time frame identified in the approved proposal at the start of the project. To quote the MD, “Once a project gets going, the faculty in charge of the project is treated as the Director of the Project, with all the freedom, responsibility and accountability.” The then Director of the Institute concurred with this view.

Broad Range of Activities of FITT

Over the ten years since its inception, FITT has got itself associated with a variety of activities, serving both the academic community and external stakeholders, especially the industry. What follows below are glimpses of some of the critical activities of FITT.

(A) As Marketing Arm of the Institute

Of the principal roles of FITT, the one that must come first is that of marketing, that is, promoting IIT Delhi as a source of technology expertise and improving the visibility of the Institute and its faculty. Following are some of the activities carried out by FITT in this direction.

I. Publicity and dissemination of information about missions, objectives, faculty strengths and programmes of IIT Delhi and FITT are being done though

· Organizing regular Industry-Academia summits – four such summits were held in the last ten years, one with CII in 1994, one with FICCI and DST in 1999 and two with IIT Delhi Alumni Association in 2001 and 2002. Between 150 and 200 delegates participated in each of these meets, including a number of leaders from industry, government and R&D organizations.
· Participation in industry exhibitions organized during national or international meets or events is one other opportunity to spread information about IIT Delhi among the public at large and potential partners in industry – FITT took part in more than ten such exhibitions.
· A quarterly newsletter, FITT FORUM, is published and sent to more than 4000 recipients in India and abroad.
· Selective dissemination of publicity information about IIT Delhi and FITT is regularly done though features and articles in newspapers and magazines, and TV channels, and occasional promotional advertisements
· Interactions through industry visits along with faculty members, regular correspondence, presentations in seminars, conferences and workshops
· Hosting eminent visitors from industry and knowledge institutions in India and abroad, organizing meetings and seminars

II.A separate website (www.fitt-iitd.org) has been created and linked with the
official websites of IIT Delhi and a number of other knowledge institutions

III Interactive relationship has been established and maintained with industry
associations like CII, FICCI, PHDCCI, and ASSOCHAM through
membership of Technical and Education Committees of individual
associations.

IV A Corporate Membership scheme has been in place in FITT from its
inception. Corporate Membership is offered to industry firms, industry
associations and user/service organizations on payment of nominal
admission/annual fees. A number of benefits are offered to the Corporate
Members in availing IIT Delhi and FITT services, contracting of industrial
consultancy and R&D projects

(B) Project Management

The second primary role of FITT was that of manager of projects undertaken by the faculty members of IIT Delhi. These include

· Transfer of Technology to industry; Between 1993 and 2003, some 40 agreements were entered into on such projects, valued at more than Rs 10 millions. These technology transfer projects were taken up i) in as is where is state, ii) in consultancy and upgradation mode or iii) through prototype/pilot plant development route. Examples of tech transfer from IIT Delhi are:: Sobid Hardware Prototype, Jute-Coir, High Frequency Modem, Super Critical Fluid Extraction (SCFE), and Rust Guard Technology.

Prior to the advent of FITT , hardly ten technology transfers worth less than Rs 1 million had happened in 30 years at IIT Delhi

· Research Partnership programmes; Every year a number of industry sponsored large Research programmes are initiated in FITT with one or more academic faculty as principal coordinators. Also included in this category are R&D programmes that were jointly undertaken with industry ( such as Dupont, Mody-Xerox, DCM, Glenmark, BHEL, DRDO) and those taken up with international agencies like EU, GEF etc.

· Problem solving consultancy assignments from industry. These are projects of short duration, from a few weeks to three to six months. Though most of projects of this type had a strong technology or research orientation, many faculty members chose also to conduct routine consultancy work involving vetting and / or evaluation of designs, product testing etc, in order to benefit from the flexible systems in FITT. The number of projects pursued in FITT in this category rose from under five in 1993-94 to as high as 315 in 2000-2001. The value of such projects in 2000-2001 was nearly Rs 34 million.

· Technology update HRD Programmes and Training Courses: Three types of programmes are taken up by FITT in this genre; first, those founded on a specific technology expertise area of one or a group of faculty/scientists (these are short duration courses), second, customised courses for one industry firm or a cluster (designed around the expertise and infrastructure base of a faculty group or departments), and third, bridge courses of fairly long duration of weeks or even months (aimed at developing in specific technology areas trained manpower, who would become ready to get placed in industry). FITT has been responsible for managing hundreds of such programmes in the last ten years. Illustrative examples of successful courses of the first type are: a 2 day course on Fiber- optics Applications, a 3 day course on Polymer Processing, a 7 day course on Internet Computing. Similarly one can highlight the courses on Coastal Marine Science (for UNESCO), Corporate Communication (for Paharpur Business Centre), Digital Signal Processing (for Motorolla) as belonging to the second category. Of the third type, quite a few long term Bridge Courses have also been devised and managed by FITT in partnership with industry. The ones that made the most impact include i) the 9 month long Advanced Course on Software Technology, ii) 20 week Course on Cryptology for the Defence Personnel, iii) 3 month long course on Embedded Systems and Application. These bridge courses attracted quite a response, and have all been repeated a number of times. Value of all these fee-based HRD programmes has been rising, from less than Rs 0.5 million in 1993-94 to nearly Rs 10 million in 2001-2002.

(C) Facilitation and Value Addition

Apart from marketing and project management roles, FITT also gave a lot of thrust on another function, namely, facilitation and value addition to the academic community to help them interact effectively with industry. Under this head the most prominent activity must be the one related to managing the Intellectual Property Rights (IPR) interests of the academic community in the Institute.

FITT decided to take the IPR management function seriously from 1996, with appointment of an IPR specialist in its core professional staff. A number of IPR awareness seminars were held at IIT Delhi. A campaign was initiated throughout the Institute to inculcate a culture for filing of IPR applications on novel research output and new technologies developed, with slogans like “Patent Before Publication”, “Search Before Research”, and “Patent Publish and Prosper”. An IPR Standing Committee was constituted in the Institute, with Dean (IRD) and MD (FITT), Associate Dean (IRD) and the FITT Executive Consultant (IPR &TT) as permanent members and up to three external IPR experts and three internal faculties as temporary members. This committee’ terms of reference was to evaluate proposals for patents and other IPR applications received, and clear them for submission to the Indian Patent Office and other competent authorities. FITT takes responsibility of following up on these applications. In the last ten years, FITT filed more than 120 patent applications. This compares with less than 15 patent applications filed from IIT Delhi between 1963 and 1995.

Another major task undertaken by FITT was to identify the wealth of outputs of R&D work carried out in the Institute in the past, and select nascent technologies there from that have potential for commercial application. A Compendium of IIT Delhi Technologies were first brought out in 1996, and distributed widely among industry and government circles. Around 230 technologies had been listed in the Compendium. The Compendium was revised in 2003. It was put up on the FITT website in easily searchable mode, so that the interested Industry clients could directly contact the inventor faculty and discuss the possibility of collaboration on the technology chosen.

FITT has often given platform to faculty for, and facilitated, direct interaction with industry and helped development of large collaborative programmes at the Institute. Examples are the VLSI Design Technology and Training (VDTT) Scheme, Transportation Research and Injury Prevention Programme (TRIPP), EU-India Cross Cultural Programme etc. The helping hand provided by FITT has been in the form of pre-project seed funding, organizing promotional workshops, Technology Appreciation and Future Vision Seminars, setting up of inter-disciplinary groups and so forth. Certain amount of money is earmarked in FITT budget every year for providing developmental support to faculty scientists in initiating a Project.

FITT also provided substantial funds to help augment infrastructure of the Institute and set up new laboratories with specialized equipment in quite a few high technology areas like Medical Textiles, Pharmaceutical Biotechnology, Biochemical Engineering and Nanotechnology. It also has instituted annual awards for best industry relevant PhD and M Tech projects carried out in the Institute.

(D) Promoting Entrepreneurial Spirit in the Academic Community

Besides inculcating an attitude of commercial ethos, the Foundation has also taken upon itself the task of encouraging the spirit of entrepreneurship in the faculty, graduating students and scientists at large. The most significant act of FITT on this count has been the conceptualization, establishment, and later, administration of the Technology Business Incubation Unit (TBIU) Programme in IIT Delhi.

A Technology Business Incubator by definition denotes a location in which potential entrepreneurs with business ideas can receive assistance (that may otherwise be unaffordable, inaccessible or even unknown) in the form of proactive supports like access to critical technology tools, laboratory facilities, information about and contact with experts in relevant areas, use of shared services, interaction with other fellow entrepreneurs, and access to professional help in business planning, HR, finance, operations, marketing and other management skills. The TBIU at IIT Delhi was designed as an incubator to provide infrastructure on campus for a limited duration (2-3 years) to facilitate research and Development to convert nascent Technological Ideas into Commercial entities. It is open to first generation entrepreneurial hopefuls from among the faculty, graduating students, alumni and research staff of IITs, technology based start-up enterprises and SMEs. It was formally operationalised in July 2000 when a small office space was provided in the campus, adjacent to the academic area. FITT utilized a part of its surplus funds to develop the space adequately with basic amenities for the offices as well as the common facilities like communication and internet systems, reception and conferencing arrangements with a view to creating a modern hi-tech working environment for the entrepreneurs. Later, FITT funds were also made available for arranging facilitative supports such as seed financing, marketing, IPR and other legal service. The most important role of FITT was to provide the interface between the entrepreneurs and the academic community and the technology infrastructure of the Institute.

The idea of promoting entrepreneurship through the incubation process had evolved in the United States in the early eighties, and in the next two decades became widespread in many other developed and developing countries. In 2000, there were some 4000 Incubators around the world, of which approximately 900 were in the USA. FITT administered TBIU in IIT Delhi was a pioneering effort in India. Students in their senior years (in the undergraduate or postgraduate study period) were encouraged to strive to commercialise ideas emanating out of their senior projects at the TBIU, with guidance but not necessarily full time involvement from their professors. Many IIT Delhi faculty members often have industry connections, which can be a rich source of demand for solutions towards technical problems that had a ready and willing market locally and, even elsewhere in the country or world at large. For example, one IIT Delhi start up Kritikal Solutions (incubated in TBIU) applied computer vision and embedded system designs (that were worked on as research projects by the student promoters in their final year of graduation) to develop gadgets for camera based surveillance, traffic monitoring, vehicle authentication and vehicle underside scanning. These projects came up with solutions to an existing need in the security starved organizations in the Indian market place.

By the end of 2003, seven first generation incubate companies had become members of the TBIU, of which three belonged to the entrepreneurial aspirants from among freshly graduated IIT Delhi students and their erstwhile faculty professors. Kritikal Solutions was one such start up company, which later graduated from TBIU (after about three years of stay) and moved out to its own office premises outside the IIT Delhi campus.

Financial Management of FITT

One key condition laid down in the original concept paper on FITT was that it would have to be financially independent of IIT Delhi and would not pass on any of its financial liabilities to the Institute. To begin with, the corpus money of Rs 16.2 million was transferred by IIT Delhi to FITT, so that interest earned on it could be utilsed for the organisation’s sustenance in the initial years. It was also agreed by the institute that funds received on all projects handled by FITT (as indicated in B above) would be managed by FITT, and a service charge of 10% would accrue to FITT from each of these. In addition there were a few other resource generating activities given to FITT by the Institute to coordinate, like marketing of the video courses delivered by many faculty members and recorded on line in the state of the art studio-classroom. FITT was entitled to 10% service charge on each of such sales, made primarily to technical colleges and polytechnics in different parts of the country. The Corporate Membership fees (see A IV above) were also collected by FITT.

There is little doubt about effective financial management at FITT over the years. The income generated from various heads as indicated were utilized not only for the establishment and administrative expenses of FITT, but also to cater to all the other marketing, facilitation and TBIU activities listed in the sections A, C and D above. Every year, a significant amount of surplus got generated. By the end of 2001-2002 financial year, the corpus with FITT grew to nearly Rs 56 million. The net cash transfer to the IIT Delhi had exceeded Rs 16 million out of the technology projects and consultancies completed in FITT. This was over and above the cash paid to the Institute at market rate for office space and logistic support.

FITT and IRD – A Dichotomy in Vision and Practice

Ever since FITT came into existence in 1993, the conflict of interests with IRD, the in-house unit for industry interaction, has been a matter of contention in IIT Delhi. It may be pointed out that IRD had to function within the strict, and sometimes, archaic rules of the IIT system. In those days, the bulk (more than 90%) of the externally funded projects were sponsored by the Departments or organizations of the Government of India, which were themselves bound by the pre-economic reform restrictive environment that inhibited extensive interaction and exchange between commercial establishments and the academic institutes. Almost all the externally funded research projects or industrial consultancies came directly to the Institute, or due to individual initiatives of the faculty members concerned. The activities of IRD were concentrated mainly on keeping accounts in the sponsored projects, and ensuring that the faculty and scientists involved in these projects operated within the rules, regulations and procedures prescribed by the Institutes, some of which might had been laid down two or three decades ago. The staff strength of IRD (mostly at the non-executive level) was fairly large (more than 40). They felt threatened by the emergence of a parallel organization, which was autonomous in character, lean in structure and pro-active by nature.

During the first conversations that MD FITT had with some of the senior professors, he was told by some that FITT would remain handicapped in its working horizon if IRD continued to remain separate. The BOG of the Institute also had similar apprehensions; a resolution was passed in a 1994 BOG meeting proclaiming the complementality of the two organizations. (See Exhibit 3). While administration of long term generic research projects and QIP teachers’ training projects were to be pursued in IRD and CEP respectively, all industry related research, technology transfer, problem solving consultancy and HRD programmes fell under the ambit of FITT. This resolution was, however, not strictly enforced, and it was left to the faculty members concerned with the given projects to opt for FITT or IRD.

A number of negative perceptions were prevalent among the faculty members regarding taking up projects under the aegis of FITT. The first perception was that, if a project is done through IRD, the IIT Delhi administration will provide a protective umbrella if some dispute with the project sponsor takes place at any stage during or after implementation. In reality, the same was true in case of FITT projects too, as in all projects undertaken at IIT Delhi, FITT acted on behalf of, and not independently of the Institute. The second perception was that FITT would be monitoring the progress of the projects in terms of quality and time of delivery and that could sometime put undue pressure on the academic freedom of the faculty member. This was partly correct, since FITT had to be answerable to both the faculty and the Industry client. But it also had the authority and wherewithal to keep constantly in touch with both parties, in order to modify the objectives, scope and outcome of the projects. The third, and the most difficult perception to remove from the minds of many faculty members, were that projects under IRD would be considered more favourably by the Institute management, than those taken through FITT, at the performance appraisal time. This was, of course, not true at all. Such perceptions had to be addressed by FITT through careful public relation exercise among the academic community in the Institute.

Open, flexible and simplified operational style of FITT nevertheless led to rapid growth of external activities in the Institute, mainly involving industry at large. (See Exhibit 4, 5). A major factor behind this expansion was the improved visibility of the Institute as a result of the marketing efforts of FITT. The number and value of programmes undertaken by FITT itself showed rapid growth between 1995 – 96 and 2000 – 2001. (Exhibit 6, 7, also see Exhibit 1). Notably, the number of institute faculty members who chose FITT for projects also grew dramatically between 1993 and 2000 – 2001, from a mere three to more than 140 (Exhibit 8). It may be mentioned here that previously at IIT Delhi, the faculty member associated with external projects seldom crossed 50 in any single year.

From the very beginning, FITT did not consider IRD as a competitor organization; rather, the complementality link between the two organizations was constantly stressed. As the number of external assignments grew, the IRD also changed its way of dealing with the faculty, moved into an open office, simplified many of the rules and procedures. Yet by 1997 – 98, the number of projects on technology development, technology transfer and industrial consultancies at FITT was approaching the number pursued by IRD. This statistic created a certain amount of unease within the IIT Delhi system, and apprehensions were raised whether FITT activities over reached the mandate of the organization.

In 2000, the IIT Delhi Board of Governors (BOG) constituted a sub-committee to review the functioning of FITT. The subcommittee which submitted its finding to the BOG in early 2001 recommended that FITT should not get involved in routine consultancy and short term training projects from industry, which may be left under the purview of IRD. Large research programmes sponsored by government ministries, departments and agencies would also be in the domain of IRD. Instead, FITT should encourage faculty members of the Institute to take up only high value technology development and transfer projects contracted from industry, as well as longer term bridge course type HRD programmes only, and concentrating on marketing, facilitation and TBIU activities. This change of stress got reflected in the performance of FITT in 2001 – 2002 and 2002 – 2003 (as seen in Exhibits 1, 6 and 7), indicated by the drop in the number as well as the value of projects. Though quite a number of high value technology development programmes and long term bridge courses were undertaken, the projects involving direct technology transfer did not grow in these two years. Since most of the technologies emanating out of academic research are in embryonic stage of development and were pursued mainly by students who leave the Institute after graduation, it is often a difficult task to persuade industry clients to take up up-gradation and commercialization of such technologies. Substantial effort and some alternative strategy have to be mounted in this direction. On the other hand, more willing and capable faculty scientists have to be identified and induced to take up high quality high value technology development projects that would lead to technology transfers to industry. Sustainability of FITT and industry interface activities depends on it. The question is, how can it be done?

Challenges before FITT

After ten years of operational experience, it was time to revisit the original concept of FITT and lay down the challenges that confronted the organization for moving forward. FITT was set up as to promote close partnership relationship between the academic community in the IIT Delhi and industry at large that was the primary user of the end product, be it the form of graduating students or the outputs of the academic activities carried out in the Institute. Its mission was to foster, promote and sustain commercialization of the S&T efforts in the institute for public good. Effective attainment of this mission can help the Institute in its critical functions to recruit, reward and retain faculty members, to kindle entrepreneurial spirit among faculty and students, facilitate setting up Technology Enterprises and, thereby promote economic growth of the country. In the process resources get generated in the Institute for additional education and research. The Science and Technology Policy of the Government of India, pronounced in 2003, coincidentally also laid emphasis on developing strong interactive linkage between industry and technology institutions, and recommended setting up of autonomous Technology Transfer Organisations (TTOs) in Premier Academic Institutions and R&D Labs. Industries in private and public sectors were promised highly attractive fiscal incentives to work with knowledge institutions. In almost all respects FITT could be cited as the first autonomous TTO established in India, some ten years ahead of the S&T policy declared in 2003. It is therefore but natural that FITT should gear up to take advantage of the new policy, which also envisaged a substantial increase in S&T outlay in the future five year plans of the country.

In this context, one may propose the concept model of a Technical University or Institution transforming itself to a Technology Enterprise or an Entrepreneurial Institution. Exhibit 9 illustrates this concept. While undergraduate and postgraduate teaching and research remain a primary function of the University, the TTO is an integral part of the system. The faculty members and research staff in various departments and centres along with the core infrastructure like libraries, workshops, class rooms and laboratories are key elements for both the functions. Though marketing and promotional activities remain a priority function of a TTO, industry interfacing and managing high value R&D projects, consultancies and HRD programmes provide the mainstay of the organization, for its sustenance as an independent unit. In IIT Delhi scenario, this group of activities has a certain degree of overlap between the IRD, the in-house industry interaction unit of the Institute, and FITT which is the TTO. The recommendations of the 2001 BOG Subcommittee to entrust state funded large R&D projects as well as the routine consultancies and training assignments to IRD are perhaps convenient to FITT, since such projects tend to be bound by a plethora of rules, restrictions and regulatory systems, which are anathema to the ethos of flexibility and autonomous character of FITT. Noticeably, the 1994 directives of the BOG regarding IRD/FITT relationship (Exhibit 2) were somewhat similar to the recommendations of the 2001 subcommittee.

A Technology Enterprise needs to lay great emphasis on creation and safeguarding of the Intellectual Properties that belong to them and get created during the course of research and technology development activities. In a university, IP may get generated during the regular UG/PG research, as well as in funded R&D Programmes. The interface units can play a meaningful role in facilitating identification, and safeguarding the rights of the IPs. In IIT Delhi, FITT performs this role with cooperation from IRD. The commercialization of IPs, however, falls in the domain of FITT, since by statute, IIT Delhi which was created as an educational institution, cannot indulge in any business transactions.

The other most relevant feature of a Technology Enterprise is that it not only aims to bring industry and academia together, but also provide opportunities to bring about new industry enterprise, by fostering the spirit of entrepreneurship among the faculty members, the research community and students. The entrepreneurial function of a Technology Enterprise is usually undertaken under the umbrella of the TTO, and exemplified by a Technology Business Incubator, which seeks to promote setting up of start-up companies based on commercialisable IPs and technological ideas emanating out of research work. The TBIU in IIT Delhi, which is administered by FITT, qualifies in this category. An incubatee company that successfully graduates from the Incubator will either operate as a commercially viable and independent Start-Up Company, or can move to a Science and Technology (S&T) Park nearby for further experimentation and upscaling. Many an incubator abroad also has a dedicated Innovation Venture Fund attached to it, created out of contributions from Government, local bodies (like the Local Council or municipality), financial institution (FI), industry, industry association, charities and, of course the University itself. Such a fund can be used for providing seed support to fledgling incubatee companies, or even initial Venture Capital resources to graduating start-ups. With growing success of the TBIU experience in IIT Delhi, there is scope for working towards creation of an S&T Park and an Innovation Venture Fund.

The challenges for FITT in the foreseeable future lay in transforming IIT Delhi into a Technology Enterprise in the real sense, as shown by the flow chart of the Exhibit 9. It has the opportunity to transcend the mere interfacing and marketing functions, and become a vibrant TTO, that encourages entrepreneurship, promotes innovation and interdisciplinary integrative culture of collaboration among academics and industry professionals, facilitates augmentation of Institute infrastructure, and in the process contributes to enrichment to the courses and curriculum of the university.

Concluding Remarks

The birth of FITT in 1992 was in response to a need to emphasise the importance of close interactive relationship between the industry and the academia in the IIT system. The first ten years of functioning of FITT no doubt proved the point, as seen by the manifold increase of the quantum of the industry academia interaction at IIT Delhi. After FITT came into being and brought about some significant flexibility and simplicity in the ethos of institute’s interaction with outside world, the previously slumbering IRD unit also showed clear signs of improvement in functional efficiency. The fortune of FITT was somewhat affected by the implementation of the recommendations of the 2001 IIT BOG subcommittee that reviewed FITT. As the Managing Director (MD) of FITT came out of the GC meeting in late March of 2003, he realized that if FITT was to continue as a thriving industry interface organization, it needs to undergo change, in structure, and in functioning. There was need for seriously introspecting on the following options, which may not necessarily be mutually exclusive.

1) Should FITT retain its present image of complementing the functions of IRD, and competing with it, in attracting faculty and researchers of IIT Delhi for projects and other industry related activities?

2) Alternatively, FITT could undergo a role change to the one transcending from that of a mere marketing arm and industry interface to a facilitator for transforming IIT Delhi into a full fledged Technology Enterprise, as illustrated in Exhibit 9 and explained briefly under the heading Challenges for FITT above.

3) Should FITT devote a major part of its effort towards identifying, motivating and encouraging the sizable proportion of the faculty community (especially those who are yet to give up the garb of pure academics) to take up high value high technology programmes with industry partners, and induce some of them to become entrepreneurial?

4) Should FITT devote full time as an Incubator Organisation only, leaving the industry interface functions to IRD? The question of sustainability will however hover on FITT, because entrepreneurship activities in India remain highly uncertain and risky.

5) Should FITT transform itself as a totally distinct entity in relation to IRD, in terms of objectives, and selection and implementation of activities? Perhaps, it could make its services available to institutions and universities other than IIT Delhi, and thus gradually reduce its dependence on the parent host institute.

6) As a corollary to the option 5 above, FITT may decide to change its organizational character from a non-profit making Registered Society to a Company under Article 25 of the Company Law of India.

Bibliography
1. Anon , Managing University – Industry Interactions – Case study on IIT Delhi,
UNESCO Report, March, 2000, New Delhi.

2. Kulakowski Elliot & Chronister Lynne, Research Administration and Management,
Published by Jones & Bartlett Publishers, 2006.

3. Bayh- Dole Act, http://www.autm.net/aboutTT/aboutTT_bayhDoleAct.cfm

4. Concept paper on FITT, IIT Delhi Internal Report, 1991.

5 MOA of FITT, 1992.

6. Annual Reports of FITT, 1994 to 2003.

7. Science and Technology Policy, Government of India, 2003

8. AK Sengupta, Entrepreneurial Development through Technology Business Incubation in
a Technical University: A case Study of IIT Delhi, presented at the International Conference on
Decision Sciences and Technology for Globalisation, Jan 2-4, 2008, IMT, Ghaziabad

9. A Bhatnagar and R Minocha, Rise of Global Entrepreneur: Leveraging the India-US High Tech
Corridor, Stanford Technology Venture Program Report, STVP 2005-010, August, 2005

EXHIBIT: 1

EXHIBIT: 2

EXHIBIT: 2ORGANISATIONAL CHART OF FITT

EXHIBIT: 3

IIT Delhi BOG Resolution on
Relationship between IRD and FITT (1994)

• IRD and FITT are complementary to each other.

• FITT will operate
All Technology Transfer & Turn-key projects.
Research Partnership programmes with industry.
Innovative Consultancy and Retainership Programme
(worth Rs.1 lakh for large industries and Rs.0.20 lakhs for SMEs)

• IRD will operate
Long term generic research sponsored by Govt. bodies and agencies other than Industries.
Other consultancies
Joint projects with multi-institutional bodies
(if necessary, with FITT)

• IRD to be linked in IITD for locating potential technologies out of R&D programmes taken up in the Institute.

• FITT should be the agency for all HRD Programme for industry (CEP)

• QIP programmes to be conducted through the Institute.

• All programmes requiring Operational Flexibility to be done in FITT

EXHIBIT: 4

EXHIBIT: 5

EXHIBIT: 6

EXHIBIT: 7

EXHIBIT: 8

Exhibit 9

2007-11-20T23:16:00.000-08:00

Proposed
TEXT BOOK ON KNOWLEDGE MANAGEMENT

About the Book

In the Industrial Age wealth was created primarily by the physical assets. In the emerging Information Age, management of intellectual capital of an organization has become increasingly important for creating wealth. Knowledge Management is about how to use the information available to the organization to create wealth. It deals with providing the mechanism of capturing, creating, transferring, sharing and integrating the tacit, implicit and explicit knowledge existing within and outside the organization and apply it as a strategic resource to gain competitive advantage. Knowledge management skills are required in organizations both in public and private sectors. There is a growing need for individuals who have appropriate training and experience in the KM functions in order to effectively leverage the organization’s information resources for adding value to all its functions.

There is a large amount of literature and many books and monographs on Knowledge Management that has been published in the last fifteen years or so. But there are only a few books that can truly be regarded as textbook for students of Management, ones that begin with the basics and go on to provide the necessary inputs to extend the interests of the students on the subject for a life long learning. The aim of the proposed Textbook is to acquaint the students with some of the relevant skills that can enable an executive or a researcher to work as an effective and creative Knowledge officer. The book will seek to develop students’ understanding of ways in which intellectual capital is created, shared and built upon, with particular emphasis on the role of Knowledge in supporting corporate strategy.

Chapters and Outlines of Topics in the Proposed

TEXTBOOK ON KNOWLEDGE MANAGEMENT

Based on the Elective Course offered to the PGPM and PGP class in 2006-07
First draft

Dr Arya Kumar sengupta
Professor, International Institute of Management, New Delhi

Chapters

1. Knowledge and its Attributes-- A source of Competitive Advantage

· Knowledge as a Source of Competitive Advantage
· Knowledge = Intellectual Capital
· Evolution of Knowledge Society
· What is Knowledge?
· Knowledge Hierarchy
· Epistemology - Philosophical Enquiry of Knowledge
· Knowledge Processes
· Primary Types of Knowledge – Tacit and Explicit

2. Knowledge Management - Concepts and Strategies

· Defining Knowledge Management
· Drivers of Knowledge Management
· Nonaka’s Model of Knowledge Sharing and Conversion Process
· Communities of Practice
· Knowledge Management Cycle
· Roadmap to Knowledge Management in an Organisation
· Organisational Restructuring for facilitating KM
· Benefits accrued to Organisations embracing KM

3. Human and Organisational Aspects of Knowledge Management

· Organisational Knowledge Levers
· Human Motivation in Knowledge Management
· Organisational Culture and Knowledge Management
· Linking Business, Knowledge and HRM Strategies
· Learning Organisation
· Managing Knowledge Workers
· Pre-requisites for deployment of a KM System in a Company

4. Management of Innovation and R&D

· Business Environment Today and Prescriptions for Meeting The Challenges
· Creativity, Invention and Innovation
· Types of Innovation
· Building Innovation Capability
· Entrepreneurship and Intrapreneurship
· Management of R&D Functions
· Corporate-level R&D Investment Strategy
· Laboratory to Market Place Route for Commercialization

5. Knowledge Management Infrastructure

· Basic Process Elements of Knowledge Management in a Company
· Primitive forms of KM
· Post-computers, Pre-Internet and Post Internet KM
· Infrastructure, Infostructure, Infoculture
· Role of IT/ ICT in KM
· KM Tool Categories
· Designing IT infrastructure of a KM system
· Evolution of Organizational Applications of Information Technology
· Examples of IT Infrastructure for KM in Industry at large

6. Knowledge Audit

· Why Audit Knowledge?
· Purpose of Knowledge Audit
· Issues examined during Audit
· Benefits of Audit
· When to conduct Audit
· Steps of the Audit Process
· The Knowledge Audit Team
· Stages of Knowledge Growth
· 8 Cs of Knowledge Audit

7. Knowledge Management Metrics

· Some Visible Impacts of KM and Eventual Benefits expected
· What are Metrics?
· KM Metrics: What and how to Measure
· Some examples of KM Metrics
· Basic Principles of KM Metrics
· Common Traps in Choosing Metrics
· Illustrations of KM Metrics in selected Industry Firms
· Siemen’s Knowledge Management Maturity Model (KMMM)
· MAKE Awards

8. Intellectual Property rights (IPR) in Knowledge Management

· Knowledge Economy Environment and relevance of IPR
· Basics about IPR
· More about Patents
· Brief discussion on Patents Act of India (2005)
· Innovation and IPR
· Knowledge Inputs for IP creation—Ownership and Confidentiality Issues
· Role of IP in Research Collaboration
· Bayh-Dole (Patents) Act of USA
· Policy Framework of Govt of India
· Patenting Abroad- profiles of WTO, TRIPS and PCT

9. Concluding Remarks

Note: In all the eight subject chapters, we shall include case studies, review questions, exercises etc

2007-11-19T02:43:00.000-08:00

-- KNOWLEDGE MANAGEMENT –

Is it a fad or is ita necessity in the new economy?

Professor AK Sengupta*

In traditional management literature, land, labour and capital are recognized as the three primary factors of production in the Industrial economy. These relate to physical assets. The economic prosperity in the post second world war industrially developed countries happened primarily by efficient exploitation of these assets. Between 1950s and 1980s, the emphasis was on Agriculture and Manufacturing, where availability and effective utilization of money, manpower and machines (the three Ms) played key roles. In the eighties, services industry came into prominence - in health, education, tourism, finance, business processes and so forth. Then came the Information Age, mainly through rapid developments that took place in computer technologies, both in terms of hardware and software. Together with galloping advances in the communication technologies, internet systems as well as the physical sciences, the nineties heralded the age of Knowledge Society. In the 21st century the health of all businesses, whether in Manufacturing, in Services or in Information sectors, will be determined primarily by how effective the organizations are in exploitation of existing knowledge and development or creation of new knowledge, and not by the physical assets alone.

What is Knowledge? It is more than data and information that have been accumulated in the past, or gets collected everyday. Experience, value judgment, insight, contextualisation, intuition, evaluation and belief are some of the process elements that go into converting data and information into what can be called Knowledge. In other words, development or creation of Knowledge is an intellectual process, originating in human minds. From an organization perspective, however, it is often embedded in collective practices, processes, routines, systems, and norms. They are the intangible assets of a Company, that are exemplified by the academic expertise, competency and skill in the people, the breakthroughs and intellectual property like patents and research outputs, the innovative business ideas, customer loyalties and feedback, the past experiences (both in terms of achievements and failures) and so forth.

In the industrial world today, the ability to make use of the intangible assets in the Company is far more decisive than its ability to exploit its physical assets. Managing Knowledge is as important as managing financial capital or physical plant. As the market shifts, uncertainty dominates, technologies proliferate, competitors multiply, and products and services become obsolete rapidly, successful Companies are characterized by their ability to create new knowledge consistently, quickly get it disseminated and absorbed, and embody it in their new products and services. Today’s mantra is “innovate, innovate, innovate”.In the era of Knowledge economy, the command-and-control management model of the industrial past will not work. The Knowledge Asset for the most part is not exactly corporate property stored somewhere in the files or warehouse in the Company. It is to be found in the heads of its Knowledge Workers. The employees now have to be considered assets, not liabilities, because most, if not each, of them hold some Knowledge. To quote Peter Drucker,“Post capitalist society is the Knowledge Society, where Knowledge is not just another resource, but the only meaningful resource…..Knowledge worker will play the central role in such a society…He is the single greatest asset.”

Knowledge Management (KM) is essentially about managing people, and creating an environment in which employees share what they know and innovation is encouraged. It is more of a corporate organizational and cultural challenge. It is concerned with providing a mechanism for creating, capturing, sharing and integrating the tacit (residing in the minds of people) and explicit (documents and records) knowledge within and outside the organization, and applying them as strategic resource to gain competitive advantage in the “marketplace”. The primary organizational requirement for KM is to institutionalize open communication, limited top-down control and a flat and flexible structure that promotes readiness to continually change and adapt.

To underpin the KM processes of acquisition, creation, sharing and utilization of Knowledge, there are lots of Information and Communication Technology (ICT) tools available, such as Search Engines, Web Portals, CAD systems, Decision Support Software, Groupware, Intranet, email. These tools facilitate codification, differentiation, categorization, storage, dissemination and retrieval of Knowledge. It is however most important to re-iterate that KM is not merely an IT based software system, but that it has to combine the Information system with people. It is not just about building an enterprise wide smart intranet or a wireless network, but its main focus is to help right people apply right knowledge at the right time.

There are those who believe that Knowledge Management is just another fad. They are wrong. It is as certain as the reality of Knowledge economy. There is of course much yet to be learned about how to manage knowledge most effectively, but in today’s globalised market economy, the future of many Companies could be in jeopardy if serious efforts are not undertaken to assess the knowledge needs and build capacity to expand the existing knowledge. Knowledge Management is several steps ahead of the Information Management, since the thrust changes from collating, storing, disseminating and retrieving information to using it to create, innovate and cope with competition.
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* Author is currently teaching courses on KM and Entrepreneurship & SmallBusiness Development at IMI

2007-11-19T02:29:00.000-08:00

VISITING WIPRO – AN EXPERIENCE IN INNOVATIONAND OUTSOURCING

(published in IMI Newsletter of January,2007)

Professor Arya Kumar Sengupta*

The email message that I received one morning on a bright and festive day in October was one among some thirty I receive nearly everyday. It originated from one Priya Nambiar, an executive from WIPRO, someone I did not know. Inside there was an invitation to participate in a one day event titled “Executive Briefing on Innovation @ WIPRO” at Bangalore, e-signed by the Chairman of the Company, Azim Premji himself. Soon I got a call on my cell phone from Priya, confirming that invitation which had apparently gone to some twenty Academics and Innovation Leaders (as Priya defined them) from all over India. I was pleasantly surprised, and somewhat elated, that my earlier efforts at IIT Delhi as the Managing Director of its autonomous industry interface organization, the Foundation for Innovation and Technology Transfer (FITT), and the initiator of the Technology Business Incubation Unit (TBIU) there, the first of its kind in an academic institution in India, was recognized in one of the topmost Technology Companies of India and the world. I accepted the invitation, of course.The event took place in the third week of November, and we were all there at Bangalore as the guests of Azim Premji, all expenses paid. Among the delegates there were Professor D Phatak from IIT Bombay, Professor RK Arora of IIT Delhi, Professor Jajoo of IIM Ahmedabad, Professor Sadagopan of IIIT Bangalore, Professor Rajat Moona from IIT Kanpur, Dr Subramanium, DDG of NIC, Dr Gautam Bose of NIC, SR Balasubramanium from HDFC Bank, Vishnu Varshney, MD of Gujarat Venture Finance and others. It was quite a gathering, representing tons of academic excellence and professional acumen.

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*The author teaches Knowledge Management and Entrepreneurship at IMI and is the Programme Director for the 3 year part-time Post Graduate Programme in Management (PGPM) for working Executives. aksg@imi.edu_____________

WIPRO, many do not know, is a 60 year old Company. From its humble beginning as a vegetable oil manufacturing company in the 1950s, today it has become one of the world’s leading technology service providers. Its annual revenue in the last fiscal year (2005-06) was more than $ 2.4 billion ( Rs 106 billion), of which the combined IT business accounted for $ 2 b. It ranks as the third largest Tech Tigers of India, behind TCS and Infosys. Among the three, WIPRO has arguably the broadest array of Technology Services to offer, including software programming, tech systems integration, systems management, business process outsourcing, R&D outsourcing, consulting, and hardware product engineering. It employs more than 60,000 people, of which its global tech business accounts for 54000; some 14000 were added in one year last fiscal. Its clientele and technology/business collaborators ranges from some of the biggest names in the world, GM, Hewlett Packard, Microsoft, HSBC, SONY, Royal Dutch Shell, and GE. WIPRO has pioneered a strategy of developing expertise in a wide range of different industries, from banking to retail to manufacturing. It has presence in 45 countries, including sales offices, and centres for BPO, software and hardware development and engineering in 14 countries, all around the world, apart from its vast engineering infrastructure in India. It is ranked 7th amongst the top 100 global outsourcing firms. It is listed in the NYSE. It is truly a Transnational Company of the twenty first century.

The invited delegates of the Executive Briefing Meet at Bangalore were given a glimpse of the WIPRO’s vast and multifarious activity canvas in a succinct yet effective manner. We stayed at the WIPRO Guest House at the Sarjapur campus of the Company, that also housed its corporate office. Early in the morning all of us was driven down to their sprawling Electronic City Campus that had more than 25 office complexes where some 40000 people are engaged in Knowledge work. The ambience there was more like that of an academic or a research institution, ultra-modern, high tech, disciplined and extremely efficient. We were given presentations in the conference room, and taken to some of the research labs, the Talent Transformation facility (for corporate training) and the Global Command Centre, which is the hub of the global technology service delivery activities of WIPRO.

WIPRO began its foray into Information technology in 1980 as a traditional maker of computers , one of the first firms in India, but later diversified into software programming and electronics engineering services on hire. In 1990s, when the global competition forced many western multi-nationals resort to outsourcing their IT and business processes in a big way, WIPRO was one of the first organizations in the third world to come up with the necessary wherewithal to quickly adapt to the requirements of so-called virtual corporation. Though it started with low cost routine software programming service, today WIPRO is one of the most capable tech service outfits. It has over the years developed a strong engineering R&D capability, from designing of semi-conductor chips, to creating real time operating systems, to writing software applications, to designing of user interfaces. WIPRO often plays the role of a product integrator. When “there is a need for somebody for tying together a technology from the US, the manufacturing from China, and, perhaps, intellectual property from Israel, that’s us” At the core of WIPRO’s strategy is the transnational business concept that enjoins the Company to perform various corporate functions and types of work at locations in the world where it can be most efficient. A transnational corporation also must set up infrastructure that facilitates communication and collaboration between the far-flung outposts. A number of Indian Companies have successfully joined this bandwagon; WIPRO is one of the leaders in this game. Yet only about 3% of the $700 billion global IT outsourcing was off-shored to Indian Companies in 2006. The potential for Indian tech companies is huge, and WIPRO can be a good model for many others to follow.

There is little doubt that behind the outstanding success of WIPRO is their slavish dedication to satisfaction (more appropriately, delight) of its customers and collaborators. In recent times, WIPRO’s most abiding proposition has been on Total Outsourcing. It is a long term partnership wherein the technology service provider takes the ownership of sustaining and managing the client’s IT strategy & operation; based on a service level agreement, it is a value optimized way to ensure that the client’s IT transforms its Business. There are a large number of corporate clientele with which WIPRO has such total outsourcing relationship.The other strongest contributing factor is their obsession with innovation. Indeed, innovation has been a buzzword in WIPRO in almost all its functions from its beginning. Over the years, WIPRO’s innovation journey has covered focus on R&D and market to identifying new business opportunity, to business extension, to business transformation. It has been claimed that WIPRO has been sustaining competitive advantage and consolidating its leadership, primarily because of its thrust on the culture and spirit of innovation, for which there is an established and systematic innovation management process in place. The Innovation Initiative at WIPRO is a grassroots effort, comprising idea generation, idea incubation through to successful execution. At least 5% of the Companies revenue in the 2006 fiscal has been estimated to have come from the innovation pipeline. WIPRO aims to grow to a $ 5 billion company in the next five years, for which it is targeting at achieving breakthrough innovations and a new Quantum Innovation Programme has been launched.A notable feature in WIPRO’s HR management is its emphasis on skill and knowledge upgradation. Every WIPRO employee undergoes knowledge upgradation training at least 12 days in a year. In the present continuously changing business environment, the thrust of WIPRO is in helping people to transform themselves to a higher level of skill and evolving knowledge in new areas. A large infrastructure has been developed for such purpose, and innovatively, it is called Talent Transformation. Every year WIPRO recruits thousands of young graduates, but interestingly many of them are from the science stream rather than from management or engineering. A training programme of more than three to four months later, consisting of classroom teaching, on the job assignments and boot camp exercises, the new recruits get totally transformed into WIPRO professionals. There is also a Wipro Academy of Software Excellence (WASE), which is more like a university within a company.

A one day exposure to the WIPRO way obviously cannot really do justice to the plethora of activities the Company is engaged in. One is however impressed by the environment of professionalism, innovative spirit and unbounded enthusiasm of the WIPRO combine. The management style in WIPRO is truly expressed by its Value pronouncement, appropriately named the Spirit of WIPRO, which comprise an Intensity to Win (thrust on customer success), Acting with Sensitivity (respect for individual) and Unyielding Integrity (commitment, honesty and fairness in action). Azim Premji, the Chairman of the Company, with whom we spent an hour in the late afternoon, represents the WIPRO spirit.

Reference:

a) Power Point Presentations on Introduction to Wipro (by KS Viswanathan, CEO), Total Outsourcing (by Anand Shankaran, VP Global IT Outsourcing) and Managing Innovation (by Divakaran Mangalnath, CTO)

b) Steve Hamm, Bangalore Tigers, Tata McGraw-Hill, New Delhi, 2006

2007-11-19T01:57:00.000-08:00

Intellectual Property Rights (IPR) in Knowledge
Management (KM)

Dr AK Sengupta
International Management Institute

Abstract

For an effective Knowledge Management system to be in place, the issue of ownership of the intellectual property of knowledge pieces can be of paramount importance. Safeguarding the IPRs in a transparent, efficient and effective manner facilitates identification, creation, acquisition and sharing of knowledge. This is particularly relevant for the bringing out the tacit knowledge residing with the experts and people with experience, grass root innovators and traditional knowledge holders. In this article, some of the pertinent topics related to IPR have been discussed together with their relevance to KM. The status of the IPR and R&D in India has also been briefly brought up, as well as the state of the Knowledge Society in this country.

Introduction

In the realm of KM, there are three vital processes, namely, knowledge identification, knowledge creation and knowledge acquisition. In organizational as well as societal contexts, the process of knowledge identification primarily concerns conversion of tacit knowledge that exists with people and groups into explicit and documental knowledge (on paper or on electronic contents), to clearly bring out what one knows and what one does not know that one knows, and make these explicit enough to be shared by people who may utilise the same for organizational or societal benefit. The knowledge creation process is one step ahead of knowledge identification in that it involves innovation and human ingenuity to bring forth new knowledge from the existing knowledge pool. Research, development, analysis, experimentation, introspection and many other activities are invariably linked with the knowledge creation process, that often leads to basic scientific knowledge which is then used by commercial organizations for producing new or improved products and processes that benefit society in general. Finally, there is the process of acquisition of knowledge that already exists elsewhere, -- with individuals, in universities, in research institutions, with the competitors. The purpose is to avoid “rediscovering the wheel” to the extent possible and to accelerate the process of enhancement of organizational capabilities through absorption and assimilation of the acquired knowledge, and further creation of new knowledge.

In each of the above three distinct KM processes, the issue of ownership of knowledge per se is of paramount importance. The intellectual property and ownership pertaining to a particular piece of knowledge, whether identified within, created by R&D or acquired from outside, needs to be clearly established and protected, to ensure equitable sharing of credit and wealth generated by the eventual application of that knowledge. Protection of intellectual property rights (IPR) and generating incentives for the owners are necessary for enhancing knowledge base approach to work, whether in the domain of industry and trade or in the grass root level innovations and traditional knowledge.

During the latter part of the twentieth century and in early twenty first century, the environmental system in which knowledge production and use take place has become very complex. There are many interactions between those involved, and feedbacks from markets and industry identify important and, often, radically new areas of research. The rapid obsolescence of old products and processes, faster exploitation of discoveries and innovations in new fields, and the efforts of governments to use scientific expertise more effectively in the pursuit of economic and social progress have led to policies and activities aimed at producing closer links among commercial establishments, research laboratories, governmental institutions and professional bodies. The global nature of business, economy and science and technology has broadened the scope of these links. IPR have the essential function of defining the relationships between those involved in these interactions in a changing cultural and regulatory environments, and bringing about net social benefits by increasing the rate of innovation.

Similarly at the grass root, with the level of innovations and traditional knowledge that exist in households, villages and rural economy, it is vitally important that intellectual property rights of the real knowledge holders are protected. A commendable work in this area has been done by the National Innovation Foundation (NIF), an IIM Ahmedabad based organization, who have in the last twenty years of efforts un-earthed more than 50000 innovations practised in the rural India. Approximately 100 of these innovations have been applied for patenting, including 6 for which US patents have been granted. Many of these innovations remained hidden until NIF detected them, and in many cases substantially improved them, before making them available for application to the world at large

The purpose of the present article is aimed at highlighting some of the issues concerning the interplay of IPR in the Knowledge Management Processes, in the industry, the grass root and traditional knowledge sectors, particularly in the Indian contexts.

What is Intellectual Property or IP?

Intellectual property, known as IP, allows people to own their creativity and innovation in the same way that they can own physical property. The owner of IP can control and be rewarded for its use, and this encourages further innovation and creativity to the benefit of us all. In some cases IP gives rise to protection for ideas but in other areas there will have to be more elaboration of an idea before protection can arise. It will often not be possible to protect IP and gain IP rights (or IPRs) unless they have been applied for and granted. Some IP protection such as copyright arises automatically, without any registration, as soon as there is a record in some form of what has been created.

As per the TRIPS nomenclature, eight categories of IP have been defined, for which protection of ownership rights can be sought. These are: i) Patents ii) Copyrights iii) Trademark and Service Mark iv) Design Registration v) Layout designs for Integrated Circuits vi) Trade secrets and Undisclosed Information vii) Geographical Indications and viii) New Plant Varieties. In this article we shall confine our discussions mainly on patents, though other types of IP may often be as important in deliberations in KM. In the fields of grass root innovations and traditional knowledge, for example, the geographical indications and protection of plant varieties can be of particular relevance.

IPR as an archive of global innovations

IPR System in general is a systematic process of disclosure and structured documentation of innovations that is accessible in the public domain. The System, however, gives rise to a guarantee for ownership rights by the Governments to those who created or developed the innovation in the first place, so that it can worked on, or utilsed for public good by the owners or licensed to others for commercial exploitation.

IPR database, therefore, becomes a fairly detailed archive of globally accessible knowledge base whose exploitation is subjected to caveats elaborated in specific National IPR Laws. A proper use of the IPR databases therefore forms an essential part of a global knowledge management process which can not only avoid “ rediscovering the wheel” but can also help in cost effective and strategic utilization of the knowledge that is already known, through appropriate licensing, transfer of rights, etc. Patent records, for example, contain a wealth of information on each patented invention, including the identity and location of the inventors and the inventors’ work domain, and the technological area of the invention. In addition, a patent documents also contain information on previous patents (“Prior art” and “citations”) tracing multiple links across inventions. Patent records thus can be a promising window on the Knowledge Economy. In reality, it is said that 80% of all information relating to innovations in Science and Technology are available only in the Patent Databases rather than in published literature in any other form.

Accessing the IPR Archives

On a rough estimate there have been more than six million patents granted in the world, more than eighty percent of which are now in the public domain ( at the expiry of the protection periods after the grant; for example, a patent has a life of 20 years). These patents are published by the authorities in the respective countries where their applications were first filed and granted. Many of these were filed and granted in several countries individually or through the PCT (Patent Co-operation Treaty) route. These publications are generally open for access by public at large anywhere in the world, through the websites of the websites of the Patent Offices of the country , such as www.uspto..gov (for US Patent & Trademark Office), www.ipindia.nic.in (for Indian Patent Office), www.patent.gov.uk (for UK Patent Office), www.jpo.gov.jp (for Japan Patent Office) etc, as well as printed publications.

Since novelty, originality and inventiveness are essential pre-requisites in seeking patent protection of an invention, searching of patent databases often is the starting point before applying for a patent, and also before initiating a research programme in any area of Science and Technology. Patent search and identification of citations as well as all “prior art” references are an art in itself, a complex procedure involving selection of “keywords”, databases, cross-referencing that needs to be pursued and so forth. While there are modern bibliometric techniques available for searching, several IT enabled retrieval technologies also allow targeted document detection, extraction, visualization and routing of databases.

Integrating IPR in innovation processes

Innovation is not about getting it right the first time, nor about perfecting an idea before exposing it to other people. Successful prototypes and experiments should be allowed to be rolled out gradually in order to facilitate and integrate learning. Such structures should allow organisations and individuals to learn from best practice, inside as well as outside the public service, and finally, there needs to be 'space', for refection, rejuvenation and forward development.
Innovation is the art of making new connections, and continuously challenging the status quo - without changing things for change's sake. Hence, innovation can be defined as a frame of mind. Successful innovation is first, and most importantly, about creating value. It does so either by improving existing products, processes or services (incremental innovation), or by developing products, processes or services of value that have not existed previously (radical innovation or ‘invention’). However, both kinds of innovation require the following mindsets to:

Challenge the status quo
Have an understanding of and insights into consumer needs
Develop imaginative and novel solutions.
In addition, innovation is generally associated with the following:
The willingness to take risk
Accepting high levels of ambiguity and uncertainty
Original thinking
A passion to drive the idea through to conclusions
The ability to inspire passion in others.

Innovation can usefully be viewed as being more about a certain frame of mind rather than a tangible product or a new technology. An innovative mindset will seek to improve and change in order to increase value - be it a process, a product, or a business model. In an innovative organisation, innovation will not be the domain of a department or small group of people, but the responsibility of everyone,. It must, however, be recognized that innovations, whether small, incremental or radical, almost in all cases require efforts and resources, sometimes substantial in financial terms. Therefore, protection of the IPR for all such innovations needs to be a priority so that eventual commercialization can take place.

IPR issues in individual and organizational research

All intellectual properties get created through skillful utilization of the Knowledge Assets, comprising human intellectual capital – knowledge, information, experience and insight- that resides in individual human beings (individuals), assisted by the “structural” capital of organizations, namely the work environment and facilities, proprietary software systems, networks and supply chains. In deciding the ownership of the intellectual property rights of inventions or innovations, the interests of the individual scientists, inventors and innovators must be taken into account along with that of the research organization and organizations that may have been associated in the research efforts. Intellectual inputs in research activities may include previously protected knowledge ( background IP), the pool of knowledge existing in the public domain, tacit knowledge of the people involved, commercial knowledge of markets and consumers and other ‘non scientific and non-technical’ knowledge. A scientist, who worked on his own towards an invention, may apply and be recognized the owner of an IP. However, when an IP gets created in an organizational domain, the IPR normally rests with the organization (the Research Laboratory, the Academic Institution or the Company), where the inventors belong. It is normal practice, however, to get the names of the inventors included in the IP document (eg the Patent), along with the Organization named as the applicant and eventual owner of the property. The inventors often get a share or some benefits from financial returns on the eventual commercial utilization of the IP.

Role of IPRs in Research Collaboration

With the explosion and complexity of scientific and technical knowledge during the last fifty years, resources needed for production of new knowledge ( financial, intellectual, or organizational ) are, more often than not, too large for a single organisation. This is especially true for basic research, the output of which can seldom be translated directly into useful and financially profitable returns without extensive further work of upgradation. Such research programmes or projects are mostly funded these days by public, government or charitable institutions, and conducted in a collaborative mode in academic, government and commercial bodies. So are many of the upgradation programmes, in which expertise needed are more readily available in university and research institutions, rather than in the industry or the final utiliser organisations IPRs have the essential function of defining the relationships between those involved in these interactions, and new IP ground rules are being established in order to enable the system to work effectively and efficiently, delineating the interests, rights and responsibilities of all the participant organisations and individual scientists.

Outputs of the research work can entail IPRs of various kinds ( patents and other formal IPRs) and also enhancement of skills and forms of tacit knowledge to the participants. Even those taking part primarily for financial gains ( such as the contract research institutions) will surely look for wider benefits such as increased knowledge and expertise in technological and commercial spheres. Not all the outputs may be easily translated into marketable products, but can contribute to the overall capabilities and competencies of the Companies and other collaborating Institutions.

Collaboration agreements between participating organizations are generally complex legal documents that may also have to comply with the public funding conditions. The most contentious issues often are regarding the ownership of the rights on the IPs that get generated during the implementation of the programme or project and sharing of the returns due to the eventual commercial exploitation of the same. In most countries the Governments tend to be the primary provider of funding for the basic and applied research, which are mostly conducted in universities and research organizations. Since government funding is from public money, in most countries, including the USA until 1980, the IPRs of all inventions emanating out of such research programmes usually rest with the Government agency that funded the programme, and transfer and utilisation of these inventions are controlled by the government agency.

The situation in USA changed dramatically in December, 1980 with the passage of a legislation by the name of Bayh-Dole Act (Patent and Trademark act) that created a uniform policy among the many federal agencies that fund research. The act enabled small businesses and non profit organizations, including universities, to retain the title to inventions made under the federally funded research programmes.

The Bayh-Dole Act was especially instrumental in encouraging universities to participate in technology transfer activities. Prior to the enactment of Bayh-Dole Act, it was manadatory for institutions to give up the ownership rights of all Intellectual Property developed out of federally sponsored reserarch programmes in favour of the concerned government agencies. As a result, the U.S. government had accumulated 30,000 patents. Only approximately 5% of those patents were commercially licensed. The enactment of this legislation provided an incentive for universities to get involved in research programmes that promised creation of IPs with commercial potential, take initiatives to market their innovations and also persuade industry to make high risk investments in collaborative programms. Subsequent to the Bayh-Dole Act, there has been multiple increase in patent related activities in US universities and Research Organisations. Many new inventions, successfully transfered to industry, have contributed to advances in medical, chemical, manufacturing, communication and software industries. The products that revolutionalised the world in the last twenty five years, such as Internet Search Engines,faster modems, dignostic tests for breast cancer and osteoporosis, Lithium ion batteries used in mobile phones etc, were developed as a result of licencing of university innovations.

Scenario of IP, R&D and Emerging Knowledge Society in India

Historically, the awareness on intellectual property in India dates back to 1856, when the first India Patent Act was introduced. The act was modified and amended in 1911. After independence, a more comprehensive bill on patent rights was enacted in 1970, The “Patent Act 1970” was enacted against the background of the country’s imminent thrust on transformation from a poor “agrarian” economy to a planned “industrial” economy. The emphasis was on acquisition of technology from the developed world in order to build infrastructure in all sectors of the economy. One fall out of this was the omission of the provision for registering “product patents” in the 1970 act. Instead, the “process patents” were the primary instruments in protecting IP. Know-hows for proven technology products from developed countries were procured and adapted in Indian industry. In some cases, such as in pharmaceutical products developed originally abroad, process modifications associated with cost reduction and productivity increase were carried out and similar products manufactured in India. Not only was the awareness about IPR low among the scientific communities in the country, the licensing regulations and laws discouraged patent registrations from abroad. Interestingly, patenting activity appeared to have increased at a fairly rapid rate from 1950s up until 1970, when the new and weak patent law was implemented and there was significant immediate fall in patenting, especially in the areas of chemicals, food, rubber and plastic products.

The level of patenting activity in India remained at a low level until early 1990s, when India became a member of the World Trade Organisation (WTO) following the advent of economic liberalization. The agreement on Trade Related Intellectual Property rights (TRIPS) in the WTO necessitated harmonization of the Indian Patent and other IP laws with the international standards, and accordingly several new legislations and amendments in existing laws were enacted by the Parliament in India. This included the Trade Marks Act 1999, Designs Act 2000, Copyrights Act (Amendment) Act 1999, Geographical Indication of Goods Act 1999, and the Patents Act Amendments in 1994,1999, 2002 and finally in 2005. The 2005 Patents Amendments included the admissibility of Product Patents and a host of other provisions that were meant to motivate individual inventors, organizations and firms to seek protection of IPRs. The number of applications for patenting in India, which hovered around a yearly figure of around 3000 until 1994 ( compared with the US figure of 300,000) has risen to 17500 in 2004-05. This figure is expected to increase significantly in the future, especially after the 2005 amendment.

The trends in patenting activity over the years in India reflects the generally low intensity of the research and development work done in the country. Patents are in general the intermediate inventive outputs of R&D inputs. The extent of R&D investment at the industry level in India in terms of percent of sales remained less than 1.0 for the last fifty years. In contrast, many US industry firms have devoted between 2 and 4 percent of their turnovers on R&D every year. Beyond 1995, there has been some upward trend in R&D investments by manufacturing industry in India, especially in the pharmaceutical, biotechnology and chemicals sectors, but it is still way behind the international trends. With the advent of product patents, one would expect further increase in R&D intensity in these and other sectors in manufacturing. A small amendment to the Indian Patent law, incorporating the features of the US Bayh-Dole Act, could enlarge further the scope of industry academia research partnership.

One other significant point of note in Indian R&D scenario is the extent of participation of Government in R&D activities. The share of public investment has been consistently more than 75% in Indian R&D, compared to hardly 25% by industry. In developed countries the position in this regard is totally opposite, with industry spending amounting to 70% or more of the total national investment on R&D. The bulk of the public R&D in India is conducted in national labs, universities and specialized government agencies like space, atomic energy and defence, and commercial potentials of the research outputs or technologies developed in such institutions are uncertain in the short term. IPR awareness has been low until recently among the scientists as well as the administrators. The quantum of R&D investment vis-à-vis the Gross National Product (GNP) in the country has also been minimal (between 0.7 and 0.8 %) in this country, compared with 2.5 – 4.0 % in most of the developed nations. In fact, total national R&D investment in India in 2004-2005 has been estimated to be around Rs 21640 crores ( 0.77% of GNP, and equivalent to US$ 4.4 billions), which is less than the R&D spending by some of the multinational companies on their own. There were at least twelve Companies abroad, whose R&D budget in 2005 was in excess of $ 5 billions.

The onset of globalization, advent of WTO and the signing of the TRIPS agreement, all of which took place in the nineteen nineties, have however stimulated the Indian economy to transform itself into a Knowledge Economy in the 21st century. The educational system in this country is gearing up to face the challenges, with international recognition of excellence in quite a few areas of higher education. There are more than 300 universities and 17000 higher educational institutions producing approximately 3 million graduates that include 350,000 engineers and 200,000 IT professional each year. The R&D infrastructure in India boasts of nearly 3000 Scientific and Research Organisations (SIROs) where more than 100,000 scientists are researching in a variety of scientific and technological fields, including such advanced technologies as space research, satellite communication, atomic energy, supercomputing, nano-sciences and oceanography. The intellectual capital available in India has attracted more than 150 MNCs to set up R&D centers in this country. The number of patents filed in USA by the Indian entities of the MNCs over the last few years has crossed few thousands. The IT sector alone is likely to employ 2 million people by 2014, and is expected to account for 8-10% of GDP by 2008. There are signs of rapid acceleration also in the manufacturing sector.

In the expanding Knowledge Society in India, there is a clear demand for speeding up the process of identification, development, dissemination and uptake of innovations. An effective IPR system can go a long way in this regard. For example, the number of research and industry projects carried out only in the engineering colleges and universities in a year as partial fulfillment of requirements for completing undergraduate, post graduate and doctoral degrees in India is mind-boggling, and could be somewhere around 200,000 or more. Even if only a modest 5% of these have innovative ideas that have potential for societal and commercial application, 10000 patents can come out every year. Similarly, the Indian civilization which is at least 5000 years old consists of traditional knowledge and grassroot innovative practices, unknown to outside the user circles in rural India. Safeguarding the intellectual property rights of these grassroot innovators and traditional knowledge holders would be a first step in the process of bringing them out in the open.

Concluding Remarks

Managing the intellectual property rights of innovating individuals and organizations is an integral part of Knowledge Management, where apart from identification, creation and acquisition, sharing of knowledge is an essential component. True knowledge sharing can only happen in an environment of complete trust, transparency and equitable distribution of pecuniary benefits, if any. Not long ago, “knowledge was power” for people to make progress in life. But in a Knowledge Economy, where knowledge is often used as a strategic resource for gaining competitive advantage, sharing and integrating Knowledge are also key organizational processes. An efficient, effective and transparent IPR system can help in establishing such an environment. This is particularly relevant for the conversion of tacit knowledge residing with the experts and experienced people in organizations , grass root innovators and traditional knowledge holders, into explicit and documentable variety. A good IPR system will also be the faithful link between the academic freedom of the scientists, researchers and innovators, and their rights and privileges in work environment.

In 2002, President Abdul Kalam had unveiled the vision of India 2020, which called for developing an India that is free prom poverty, strong in trade, commerce, and science and technology, and a nation bustling with energy, innovation and entrepreneurship. There is little doubt that over the last decade or so, India has made significant strides in achieving that vision of becoming a truly vibrant knowledge society. With the new IPR regime in place,, an interactive knowledge management system can be envisioned with involvement of all the participants and stakeholders in the economy.

Bibliography

-Working Paper on the Role of IPR in International Research Collaboration, 5th Framework Programme, European Commission, April, 2002
- Website of National Innovation Foundation, www.nif.org
-A Viable System Model: Consideration of Knowledge Management, A Leonard,, Journal of Knowledge Management Practice, August, 1999
-Science and Development Statistics 2004-05, NSTMS, DST. India
-Patents, citation and Innovation –a Window on the Knowledge Economy, Adam B Jaffe & M Traitenburg, MIT Press, Cambridge, MA, 2002
-India and the Knowledge Economy, Carl Dahlman & Anuja Utz, World Development Studies, The World Bank, Washington, 2005
-Knowledge Society, www.indianbusiness.nic.in/knowledgesociety/infotec.htm
-Patenting by Manufacturing Firms in India, Anil M Deolalikar & Lars-Hendrik Roller, The Journal of Industrial Economics, vol 36, No 3,March, 1989
-Measuring Knowledge Assets of a Nation: Knowledge Systems for Development, Yogesh Malhotra, Knowledge Management, Measurement: State of Research 2003-2004, UN Advisory Meeting,
UN Headquarters, NY, September 2003
-Workshop on Intellectual Property for Technical Institutions- Background Material;
Organised by Waterfall Institute of Technology Transfer, Sponsored by AICTE,
Ludhiana, March 2006

2007-11-19T01:44:00.000-08:00

Entrepreneurship Development through Technology Business Incubation in a Technical University
― A Case Study of IIT Delhi ―

Arya Kumar Sengupta*

Abstract

Universities and academic institutions are key resource centres for creation and development of knowledge, where innovations that emerge from the research programmes and technology projects pursued by students, professors and research staff can quite often be the starting points for entrepreneurship development. In USA and other developed countries, technology incubators attached to universities are known to be the cradle for many start-up businesses that have turned into hugely successful enterprises. In the last two decades, quite a few premier technology institutes in India have also established on campus technology business incubators with a view to promoting technology entrepreneurship among the students and faculty members. The Indian Institute of Technology at Delhi (IIT Delhi) is one such institution which has over the last few years quietly turned into a Knowledge Enterprise. It launched in 1999 a Technology Business Incubation Unit (TBIU) programme, which has become a veritable entrepreneurship development entity. This article attempts to put on record the gradual evolution of the IIT Delhi’s TBIU programme and the successes achieved.
______________________________________________________-
* Dr Arya Kumar Sengupta was the first full time Managing Director and CEO of the Foundation for Innovation and Technology Transfer (FITT) of IIT Delhi, and spent 12 years in that job. He is presently a Professor at the International Management Institute in Delhi, teaching Knowledge Management, Technology Management and Entrepreneurship to post graduate students of Management.

Introduction

In today’s world, knowledge has been recognized and accepted as the most meaningful resource and the most important factor of production, besides the traditional ones like labour, capital and land [1]. Creation, assimilation and utilization of knowledge is the key to continuous innovation that is at the heart of entrepreneurship, leading to competitive advantage in business and industry [2]. In this respect, universities and research institutions have been playing a pivotal role. All top technical universities and R & D organisations have research programs pursued by students, scientists and faculty members, in basic or applied sciences. Outputs of many of these researches have seeds of technology development and innovations.

There are around 350 universities in India, and more than 17,000 Higher Educational Institutions (HEIs) [3]. There are also some 1,500 Scientific and Industrial Research Organisations (or SIROs, as registered by the Department of Scientific and Industrial Research, DSIR), which operate in Industry firms, Industry Associations, Chambers of Commerce or Governmental and Non-governmental Organisations (NGOs). The resources spent on research in all these knowledge Institutions are substantial. On a rough estimate, total national investment on R & D in different Science and Technology fields in India was around Rs.22,000Crores ($5 billion) in 2004-2005, approximating to 0.8% of GDP that year. The technical manpower capable for pursuing research in this country is quite substantial – around 1,50,000 people were known to be engaged in R & D activities in the country in 2001 in public and private sectors taken together [3].

The contribution of the academic sector in national R & D is considerable. About 4.5% of national R & D expenditures are estimated to take place in the universities and HEIs in the country [3]. The seven Indian Institutes of Technologies and thirteen Institutions of National Importances (INI) like the IISc in Bangalore are particularly very active in technological R & D. For example, in IIT Delhi alone, on a given day around a thousand projects (undergraduate, postgraduate, Ph.D, sponsored R & D and industrial consultancy) are pursued by students, scientists and faculty members; many of these projects have strong research components.

Quite a few Indian students after graduations from Indian universities migrate to the West, mostly to the United States and some to Europe and other developed countries to pursue higher studies, to do research in academia and /or to enhance professional career. The Indian Diaspora have traditionally done very well in these countries – in academic excellence, professional acumen and, especially, in entrepreneurial ventures. Whether in the Silicon Valley in California or Route 128 in Boston, Massachusetts, or elsewhere in the United States, the Indian entrepreneurs have been known for their success. In Silicon Valley itself there were in 1998 at least 800 Companies that were promoted by Indians or had Indian CEOs, COOs or CTOs; more than 300 Indian entrepreneurs had net worth of $5m or more; 30-35% all new 1st generation entrepreneurs in the Silicon Valley area were originally from the Indian sub-continent; and collective net worth of all Indians would be around $25b [4]. Most of these Companies are in the high tech business – in IT, bio-technology, pharmaceuticals, new materials etc. Of the 100 fastest growing technology companies in USA in 2006, at least 10 have Indians among their top executives or founders [5].

Success stories of most Indian entrepreneurs almost invariably have a common denominator – many of them had their undergraduate college education in India, and a majority was from the IITs. While working in the US, or after completing advanced degrees there, they gained confidence in their innovative ideas and business skills and gave up their jobs in the US to start their own companies. The moot question is, if the IIT graduates can be successful in technology entrepreneurship ventures abroad (in USA mainly), can they not be persuaded to show the same spirit in India itself? The key to their success lies in the nurturing environment, the facilitating and handholding mechanism and the plethora of incentives that are available in those countries towards promotion of entrepreneurship. In the late eighties and early nineties, as globalization and free market economy began to take root in India, a number of new technology entrepreneurial companies got established in the country, such as the Infosys, the Wipro, the Satyam or the Ranbaxy; Government took a number of initiatives like setting up of Science and Technology Parks, and in many universities and academic institutions concerted moves were taken towards development of Industry Academia interaction and entrepreneurship training. The Indian Institute of Technology at Delhi (IIT Delhi) was a pioneer institution in this regard. It set up the first foundation of its kind in India to formally institutionalise the concept of industry academia interface, the Foundation for Innovation and Technology Transfer (FITT), which was financially and administratively independent of the host institution. FITT in turn was the first to organize a Technology Business Incubation programme within a University, for actively promoting the spirit of entrepreneurship among its graduating students and research faculty.

About IIT Delhi -- a Knowledge Enterprise [6]

IIT Delhi was established in 1963 as the fifth Indian Institute Of Technology, after the ones at Kharagpur, Kanpur, Bombay ( now Mumbai) and Madras (now Chennai). A sixth IIT was set up in Guwahati in the late 1990s. These institutions were created, after India gained independence in 1947, as new centres for higher education and learning, having a mission to contribute to India and the world through Excellence in Science and Technology Education and Research, and to serve as a valuable resource for Industry and Society. Among the primary objectives behind the IITs were i) creating impetus towards enhancement of Knowledge through basic and applied research in engineering sciences and ii) providing platforms for close Industry Academia Interactive Partnership.

Over the years, all the IITs have been striving to fulfill the above objectives, and have been successful to various extents. IIT Delhi in particular have 13 departments and 11 research centres pertaining to various disciplines of science, technology and social sciences, with more than 450 faculty members and 4000 students pursuing undergraduate, post graduate and research studies in some 400 laboratories and workshops. The Institute has one of the largest libraries of science and technology in this part of the world. It is an excellent knowledge center with an up-to-date infrastructure for undertaking Research and Development in Science, engineering, technology, social sciences etc.

During the last fifteen years, IIT Delhi has taken a number of bold policy decisions and initiatives that can be considered stepping stones for transforming the Institute from a Knowledge Institution to a Knowledge Enterprise. For example, quite a few Technology Companies, like IBM, NIIT and Tata Infotech, were given in-campus space for setting up their R&D extension units that allowed a degree of synergy with faculty, students and researchers. At least two new industry sponsored Schools were established for post graduate research and education, in the area of Telecommunications and IT respectively by Bharti Group and Vinod Khosla of Sun Microsystems fame. Four additional Masters level (M-Tech) courses were launched, namely in the areas of VLSI Design Technologies and Tools (VDTT), Construction Technology Management (CTM), Power Systems Engineering (PSE) and Power Generation (PG), fully supported by Industry Firms. A number of High Technology Labs were set up in the Institute with full funding support and technical association from well known multinational organizations like CISCO, Microsoft, Intel and Phillips. More than 25 industry/ alumni sponsored professorial chairs were established in emerging technology fields. And as mentioned earlier, FITT represent an independent Technology Transfer/ Marketing organization for the Institute, developed in the model of Technology Transfer Offices (TTO) that are common in most Technological Universities in USA and Europe, in order to promote close collaboration with industry and commercialization of Intellectual Properties that get developed in the research activities conducted in the Institute. It was the first organisation of its kind in an Indian institute of learning.

About FITT -- the autonomous industry interface of IIT Delhi

Foundation for Innovation and Technology Transfer (FITT) was set up in IIT Delhi in 1992 as an autonomous, non-profit making Society with a view to achieving a quantum jump in the level of collaboration between IIT Delhi, industry and other user organisations on programmes and projects of mutual interest. The basic objective of FITT is to facilitate transfer of technologies developed at the Institute to the industry, to promote joint development of technologies between the Institute and the Industry and to market the intellectual capability of the Institute, by providing on one hand an interface, whereby it becomes possible to transfer the benefits of the R&D done at the Institute to industry, and on the other, by providing industry with a channel to utilise the expertise and facilities at the institute for technological solutions/development and continuing education. In short, FITT’s primary objective is to function like a “marketing arm” of the Institute and bring in industry and other external agencies to interact, collaborate and cooperate with the Institute in a partnership mode. Through these, the Foundation is also expected to facilitate additional resource generation for the Institute, and maintain technological relevance in its academic programmes. FITT is administratively and financially independent of the Institute and recognised as a Scientific & Industrial Research Organisation (SIRO) by the Department of Science and Technology (DST), Govt. of India.

Incidentally, many technological universities in developed countries, such as USA, UK, Norway, Germany, Italy, Australia and Japan, have similar organisations affiliated to the parent body, either as a Foundation or even as a University-owned Company. Such organizations have in most instances been quite successful and effective. The performance of FITT at IIT Delhi over the fifteen years since its inception has also been quite positive. For example, the number of faculty members involved in external projects (mainly funded by industry) rose from merely 10 % in the early 1990s to more than 30% of the total faculty members by 2005. The value of such externally funded projects in the Institute soared from a paltry Rs 6.5 crores in 1992-93 to around Rs 40 crores in 2004-05. Some 100 patents have been filed by FITT (on behalf of IIT Delhi) out of the research outputs in the Institute between 1997 and 2005. Around 45 technologies got transferred to industry firms. Corpus fund of the Foundation, which was only Rs 1.62 crores in 1993, grew to Rs 5.0 crores by 2006 by way of generation of surplus from its activities; the organisation became self sustaining from around the year 2000 itself. [7]

Technology Business Incubator at IIT Delhi

Behind the success of FITT lies the principles that are observed in all its functions. Firstly, it is an organisation that provides a platform of facilitative, flexible, friendly and focused environment for fruitful mutual interaction between the academic members of the Institute on one hand, and the industry and other clients on the other, the two sets of customers of FITT. Besides inculcating an attitude of commercial ethos, the Foundation has also taken upon itself the task of encouraging the spirit of entrepreneurship in the faculty, graduating students and scientists at large. The most significant act of FITT has been in the establishment, and later, the administration of the Technology Business Incubation Unit (TBIU) Project in IIT Delhi.

The idea of promoting entrepreneurship through the incubation process evolved in the United States in the early eighties, and in the next two decades became widespread in many other developed and developing countries. In 2000, there were some 4000 Incubators around the world, of which approximately 900 were in the USA creating around 20000 incubated Companies. In China there were in 1999 at least 100 incubators, incubating 5000 start-up companies that had more than 50000 employees and over $5 billion combined turnover. Over 70% of all incubators world wide are linked to a Technical University nearby, and supported with funds, expert advice and infrastructure by local government bodies, industry firms or industry associations. [8]

When the TBIU concept was first mooted at IIT Delhi in early 1998, no other academic institution in India had yet considered such a scheme seriously. The Department of Science and Technology had however long been supporting a Science and Technology Entrepreneurship Park (S&T EP) Programme, under which budding entrepreneurs were encouraged to work in association with specific knowledge institutions in order to set up start-up technology enterprises. IIT Kharagpur was one of some seventeen academic institutions in the country to have S&T EP very near its campus, where faculty members and researchers of the Institute could provide technical support to enterprises operating from the Park. The idea of incubating a start-up is one step before the S&T EP process get under way. In an incubator, a technology concept is nurtured from its nascent stage, verified, upgraded and developed into a viable commercial proposition. Only minimal commercial activity gets done during the incubation period.

The IIT Delhi incubator finally got its approval from the Board of Governors of the Institute in 1999, after a long process of a series of discussion and evaluation by expert committees and faculty members. It was formally operationalised in July 2000 when a small office space was provided in the campus, adjacent to the academic area, where seven to eight modular cubicles were built to accommodate seven to eight incubatee start-up teams. FITT utilized a part of its surplus funds to develop the space adequately with basic amenities for the offices as well as the common facilities like communication and internet systems, reception and conferencing arrangements with a view to creating a modern hi-tech working environment for the entrepreneurs. Later, FITT funds were also made available for arranging facilitative supports such as seed financing, marketing, IPR and other legal service. The most important role of FITT was to provide the interface between the entrepreneurs and the academic community and the technology infrastructure of the Institute.

A Technology Business Incubator by definition denotes a location in which potential entrepreneurs with business ideas can receive assistance (that may otherwise be unaffordable, inaccessible or even unknown) in the form of proactive supports like access to critical technology tools, laboratory facilities, information and contact with experts in relevant areas, use of shared services, interaction with other fellow entrepreneurs, and access to professional help in business planning, HR, finance, operations, marketing and other management skills. The TBIU at IIT Delhi was designed as an incubator to provide infrastructure on campus for a limited duration (2-3 years) to facilitate research and Development to convert nascent Technological Ideas into Commercial entities. It is open to first generation entrepreneurial hopefuls from among the faculty, graduating students, alumni and research staff of IITs, technology based start-up enterprises and SMEs. Applications for residency in the incubator are screened by a high powered standing committee of experts from academic and industry professionals, based on a number of criteria like the quality of the proposal and the innovation idea, assessment of the entrepreneurial capability, potential and commitment of the applicants, potentiality of commercial viability and growth, the planned R&D intensity, and above all the homology between the Institute expertise/ facilities and the technological requirement/ R&D interest of the applicant. Once the application is admitted, the entrepreneurs concerned are obliged to register themselves into a Start-up Company before they are given office space (between 100 and 500 square feet area) as Resident. A license agreement on space utilisation and an agreement on synergy are entered into by the Resident Company and the Institute. Significant concessions on rent of space are provided to Resident Companies, who are expected to offer around 5% equity ownership to the Institute in recognition to the tangible and intangible contributions of the Institute to the Company during the residency in TBIU. An Institute level empowered committee, known as the TBIU Board, guides and monitors the progress of the programme, while FITT plays the role of the administrator, as mentioned earlier. FITT is also assigned equity stakes of the Start-up Companies when offered to the Institute and are authorised to operate the stock options on its behalf as and when required, at market price at the time of IPO in Stock Market.

The first two resident companies admitted to the Institute campus under the TBIU programme in 1999 were promoted by two aspiring and experienced promoters, both of whom had successful and chequered professional careers in multinational companies in India and abroad and could be described, in a manner of speaking, as serial entrepreneurs. Both planned to capitalize on their own experience and backgrounds (both had originally been alumni of the IIT system), and hoped to harness the resources of the institute, and motivate the faculty members and students of IIT Delhi to join in R&D partnership to develop innovative products and services. Both these companies wanted to operate in emerging new technology fields; one in high end software, financial and system Integration in Mobile/WLL Services , and the other in internet based products and services, like e-commerce, distance education, digital Library. Both aimed at markets in the US and Europe (and later in India). There was assured funding for both the companies; one had a substantial equity support from a leading foreign institutional investor (FII) and other had private equity funding from USA.

Neither of these companies could however complete the incubation experiment fruitfully and exited the TBIU prematurely. Though there were quite a few faculty members working in the technology areas of interest to these start-ups, none of them could, however, be persuaded to participate in the collaborative projects proposed by the companies, in spite of several motivational interactions the promoters had in various departments and centers across the Institute. In both the cases, however, no pre-arranged homology agreements had been arranged before they came into the TBIU, and the promoters failed to rope in the faculty members as partners. There were of course a number of other factors that contributed to the failed incubation attempts, such as the severe slow down in the IT sector worldwide in the early 2000s, delay in successful product development and reduced enthusiasm of the funding agencies; but it was felt that the absence of pre arranged homology agreements and pre planned collaborative projects were mainly responsible.

The lessons learnt from the experience of the first two resident companies led to streamlining of the operational parameters of the TBIU, including significant modifications to the guidelines and rules pertaining to participation by the IIT Delhi faculty as well as the admission criteria for new units. The need for identifying an agreed homological arrangement became an integral part of the guidelines. It was made mandatory to name one or more IIT Delhi faculty members as mentors or partners in the proposed start-up company. To encourage entrepreneurial faculty members, institute rules was liberalised for availing sabbatical leave for upto one year, and a provision was incorporated for permitting long term lien (upto five years). Other salient features of the admission requirements for residency and operations have already been discussed earlier in this article.

Student-faculty led Incubation Programme

A new Student-Faculty Led Incubation programme was taken up in IIT Delhi in 2002 for nurturing Technology Start-up enterprises. The objective of the programme was to motivate students of the Institute itself and their faculty supervisors to dedicate between six months and two years after the students graduate, in creating technology start-up companies through conceptualizing, fine-tuning, upgrading or packaging technology products or services based on ideas from their work in the previous few years. The programme was akin to running an “entrepreneurship nursery”. The ultimate goal of the exercise was to nurture the fledgling student-faculty enterprises through to “transition” into a business, marketing the developed product/service, patenting the technology and selling or licensing the IP, or even to persuade an existing large company to acquire the start-up.

The process got initiated in March 2002 through a series of inspirational lectures by the Managing Director (MD) of FITT, on entrepreneurship as an alternative career option and principles of technology incubation, to the senior students (of final year under graduate class, Masters and PhD programmes) and faculty members of various departments and centres in the Institute. It was mentioned that the graduating students could spend time at IITD, incubating their ideas into an enterprise and emerge as successful entrepreneurs. FITT promised to provide an initial seed funding in the form of monthly “entrepreneurial fellowships” to each deserving student for up to 6 months and for developing office facilities. The incubatee start-ups were assured of access to IIT Delhi computing network and infrastructure, contacts of faculty, alumni and other associates, and the overall campus environment that was conductive for advances in technology. The other motivating factors for the students (in favour of starting a business against opting for other careers or taking up higher studies immediately) were stated as follows.[9]

· Doing your own thing, that is high tech, interesting and creative
· Creating a difference through innovation. Working in the Country, for the
Country
· Growing applications in new and emerging technologies in India and globally
· IIT network and the business opportunities that could be created in and
around Delhi
· Social and cultural ethos – Despite PhD/Research and Job offers, Entrepreneur
was the hero.
· Being against the herd mentality of migrating out of India with an IIT degree

The FITT lectures led to quite a bit of stir among the students and faculty members of the Departments of Computer Science and Electrical Engineering. There were corridor gossips, exchange of emails and good many internal discussions and debates. While for students the primary issue was about taking up an alternate uncertain though challenging career rather than the well trodden path of getting into a job or going for a higher degree, for the faculty members it was their reputation in research and consultancy that was in stake; some of them were, however, excited by the prospect seeing their research ideas translate into products with the help of their own students, for the benefit of the nation and society.

Finally, one group of seven graduating students and five professors of the Department of Computer Engineering decided to take the plunge and the first student-faculty led incubatee start-up company was admitted into the TBIU in IIT Delhi in July, 2002. The company was registered in the name of Kritikal Solutions Private Limited. It planned to work mainly in the areas of computer vision and embedded systems. Kritikal was the first student-faculty led incubatee start-up at IIT Delhi. Next year in 2003, one more student-faculty group teamed up to form a start-up called VirtualWire Technologies Private Limited, this time from the Electrical Engineering department, to try their hands in the incubation exercise in the technology area of wireless application, digital signal processing and cryptography. Both Kritikal and VirtualWire spent around three years in the IIT Delhi Incubator, successfully developing technologies, business processes and clientele, before exiting from the TBIU to set up their own commercial offices outside. A short case report on Kritikal Solutions Pvt Ltd is given in the Appendix.

Enthused by the entrepreneur students of Kritikal and VirtualWire, a number of new student faculty start-ups enrolled themselves for incubation in TBIU in 2004 and the following years. Seed funding (provided earlier by FITT) was supplemented by grants from the Ministry of Information and Communication Technologies of the Government of India under a scheme to support start-ups in the area of Information Technology (IT) or IT Enabled Services (ITES). From 1999 till the beginning of 2007, fifteen start-up companies became resident in the IIT Delhi incubator, of which seven belonged to the “student faculty led incubatee” category. At the present time seven companies are resident in the TBIU. Of these, two are in Chemical Processes, two are in Bio-technology/Bio-informatics, and three deal with software and hardware. During all these years at least fifty enquiries had been received by FITT regarding possible residency in TBIU; some thirty completed applications were screened by the empowered expert committee and fifteen were admitted. Five start-ups so far are known to have “graduated” to set up commercial establishments outside.

Concluding Remarks

The Technology Business Incubation experience demonstrates that given the right kind of environment and appropriate incentives it is possible to motivate talented young people towards entrepreneurial career, even in Indian academic institutions. It has often been asked that if the Indian students with first academic qualifications obtained in India can be successful as entrepreneurs in the west, what needs to be done to catch them in India itself. The experience of IIT Delhi, and later similar initiatives taken in some of the other IITs and a few higher education institutions (HEIs), clearly indicate an affirmative answer to this question. Many graduating students, who would in normal circumstances go for higher studies abroad or take up well paid jobs in the market, can try out their passion to follow up on their own nascent and innovative research ideas. By nurturing the entrepreneurial ambitions of some graduating students in association with some of the more adventurous faculty members in a facilitative work environment, potential of creating successful enterprises opens up. Angel investors and venture capitalist companies are coming to a resurgent India with enormous funds to search for and invest in business ventures that work on novel technology ideas addressing new and expanding needs of an ever increasing customer base. The Technology Business Incubators should be the ideal place for such investors to find them and help in transforming fledgling resident companies into successful and large businesses.

Bibliography

1. Peter Drucker, Managing for Future, Tata McGraw Hill, 1993
2. David Holt, Entrepreneurship: New Venture Creation, Prentice Hall, 2007
3. Report of the Working Group on DST, 11th 5 year Plan, DST, GoI, 2007
4(a) Ignatius Chithelm & Val Souza, Public Capital Markets and New Generation of
Entrepreneurs: Success of Indians in USA, EPW special Article, October, 2005
4(b) Anon, Do Highly Educated Immigrant Entrepreneurs Help the USA to Maintain its edge,
India Knowledge @Wharton, June, 2007 .
5. Anon, 100 Fastest Growing Tech Companies, 2007, Business 2.0, CNN Money.com, 2007
6. Anon, Managing University Industry Interaction: Case Study on IIT Delhi India,
UNESCO Report, 2005,
7. Website of FITT, IIT Delhi :: www.fitt-iitd.org
8. Website of National Business Incubation Association, USA: www.nbia.org
9. A Case Study on Kritikal Solutions Private Limited, CIIE, IIM Ahmedabad, 2005

APPENDIX

Short Case Report on Kritikal Solutions Private Limited, a “graduated” incubetee company of IIT Delhi TBIU

• Idea seed was planted during a departmental interaction at the Computer Science Department of IIT Delhi with MD FITT in April 2002

• A group of 12 people (7 graduating students and 5 faculty members of Computer Science Department) joined to form the Company in August 2002 and started operating in the TBIU offices

• FITT provided all initial help including in Company Registration, Business Plan preparation and policy making
Continued next page

• Initial efforts of Kritikal were in participating in technology projects with IIT D in the areas of embedded systems (from Xerox for designing a multi functional office unit) and computer vision & image processing (from DIT, MICT for developing vehicle authentication and vehicle underside scanning devices)

• Later thrust was also given in full measure on Product Development, in focus areas like security & surveillance, traffic and transportation, telecom etc

• The business strategy has been maintained at a combination of Project (services) and product development

• Initial Office infrastructure cost of Rs 1.5 million was provided by FITT, as well as Entrepreneurial Fellowships to the 7 students for the first 6 months (around Rs 1 lakh per month)

• Exited from IITD TBIU in May 2005 and set up a commercial office in NOIDA

• At least 3 IITD alumni joined the Company at different times

• Set up a subsidiary company in August 2005 to give thrust on products

• Present Manpower is 55 people - 35 in design services and 20 in product services

• Annual revenue grew from Rs 6.5 lakhs in 2002-2003 to around Rs 3 Crore in 2006-2007

• It has received an angel funding of Rs 2 crores in 2006.

• It has an MoU with IITD and working relationships with IIT Kanpur, IIT Mumbai, IIT Roorki and IIT Chennai. IIM A has done a case study on Kritikal

• It has clients in both India and abroad