Session VI
Flemish Strategic Research Centers

The following presentations to the U.S. delegation described the three other strategic research centers of Flanders Inter-University Institute that follow the model of IMEC.

FLANDERS INSTITUTE FOR BIOTECHNOLOGY (VIB)

Lieve Ongena

Flanders Interuniversity Institute for Biotechnology (VIB)


Dr. Ongena, the senior science adviser for the VIB, said that Belgium had a long tradition of excellence in the life sciences. For example, Marc van Montagu and Jeff Schell at the University of Ghent were the first scientists to introduce a foreign gene into a plant. Walter Fiers was first to publish the full DNA sequence of a gene. And Désiré Collen discovered the gene for tPA, which has now found application, through licensing to Genentech, in dissolving blood clots and restoring circulation to stroke victims.

A Determination to Turn Knowledge into Societal Benefits

Despite many milestone discoveries, she said, there had been virtually no translation from the university laboratories to the economic growth of Flanders. This led to the strategic decision to invest not only in knowledge, but also in a mechanism to “turn research results into patents, new companies, and economic growth.” In 1995 the government funded VIB as a non-profit research institute



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Session VI ———————————————————— Flemish Strategic Research Centers The following presentations to the U.S. delegation described the three other strategic research centers of Flanders Inter-Uniersity Institute that follow the model of IMEC. FLANDERS INSTITUTE FOR BIOTECHNOLOGY (VIB) Liee Ongena Flanders Interuniersity Institute for Biotechnology (VIB) Dr. Ongena, the senior science adviser for the VIB, said that Belgium had a long tradition of excellence in the life sciences. For example, Marc van Montagu and Jeff Schell at the University of Ghent were the first scientists to introduce a foreign gene into a plant. Walter Fiers was first to publish the full DNA sequence of a gene. And Désiré Collen discovered the gene for tPA, which has now found application, through licensing to Genentech, in dissolving blood clots and restor- ing circulation to stroke victims. A Determination to Turn Knowledge into Societal Benefits Despite many milestone discoveries, she said, there had been virtually no translation from the university laboratories to the economic growth of Flanders. This led to the strategic decision to invest not only in knowledge, but also in a mechanism to “turn research results into patents, new companies, and economic growth.” In 1995 the government funded VIB as a non-profit research institute 11

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117 SESSION VI: FLEMISH STRATEGIC RESEARCH CENTERS charged with this mission. This “institute without walls” brought scientists from Antwerp, Ghent, Brussels, and Leuven under the virtual umbrella of the VIB in a joint venture. The mission of the VIB is to invest in basic research, to train young researchers, and especially to invest in technology transfer. It is also charged with explaining its mission to the public. VIB now has 850 scientists and technicians who gather once a year from their respective universities for a conference. It has 250 PhD students, who earn their PhD at their home universities in 4-5 years. Once they graduate they must leave the VIB. “We don’t try to keep them,” she said. “If they can find money to support their work, then they can come back.” The VIB itself does not grant a degree. Partnerships with Universities VIB has a 50-50 partnership with the four universities, where its affiliated faculty work in 60 different research groups in nine academic departments. The total research budget is €60 million. Half of that comes directly as a strategic grant from the Flemish government, €6 million from industry, some from the universities’ match with the VIB, and some from international sources. The research portfolio emphasizes molecular biology, cell biology, genetics, microbiology, the 3-D structure of protein, bioinformatics, and systems biology (“a fashionable term for the plant in its environment”). Its researchers also study biomedical areas, primarily cancer, neurobiology, inflammation, cardiovascular research, and Alzheimer’s disease. A Mandate “To Be Excellent” Their core facilities serve their scientists and the rest of Flanders: a micro- array facility, genetic services facility, protein services facility, nanobody ser- vices facility, a bioinformatics training and services facility, and a proteomics core facility. Their mandate from the government was “to be excellent,” and Dr. Ongena said that they took this seriously. Their scientific output for 2004, as measure by publications, showed an impact factor of 10; when the VIB opened, the impact factor was 5. They began with 700 scientists, and have expanded to 850. When they began, VIB scientists published 16 papers a year in top journals; in the past year they had published 65, a 400 percent increase during a time when the staff grew by only 21 percent. A Strategy of Licensing The main emphasis is on the transfer of knowledge into societal benefit. If a discovery is patentable, the VIB usually licenses it to a company. “But if the

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11 INNOVATIVE FLANDERS platform is wide enough, we set up our own company.” They had four compa- nies operating, including dVGen, which is developing uses of a microscopic worm, which has genes similar to human genes, for drug discovery; Peakadilly, which does crop design; and Ablynx, which uses a camel antibody as a tool for drug targeting. The licensing revenue promotes VIB’s growth and generates money for research. VIB has also given rise to a fifth startup called SoluCel, a small company in Finland, and two days before the workshop it formed a sixth company called ActoGeniX, which uses the Lactococcus bacterium that grows in the human intestine as a living drug delivery tool. GMIV, a govern- ment investment company, had invested €11.5 million in the company, which was also supported by a cluster of Dutch and German investors, some VCs, and VIB. Together, VIB’s startups employed more than 280 people, a growth of 100 in 4 years, and had raised more than €220 million in venture capital. When d4Gen went public, it raised €34 million. The VIB has also invested in a “bio-incubation” center. “If we have an idea,” said Dr. Ongena, “we can start a company tomorrow. There is also a biocluster at Ghent Technology Park employing 320 scientists who work for VIB and other companies. Reaching Out to Society She said that reaching out to society was an important aspect of the VIB mis- sion. “We want to reach people at all levels. The press and media, of course, and policy makers, but also teachers and students (we need more scientists), doctors and patients.” She described a Scientists@work school project that brings groups of 10 to 15 students into one of their labs for a half-day project so “they can see what a career might be, how enthusiastic our scientists are. We need to attract young people. Students want to go into marketing and sales to make money, so this is a major issue for us.” She summarized by saying that Flanders was succeeding in catalyzing the life sciences, thanks to “lots of players”: the university, government, angel inves- tors, industry. One indicator of success, she said, was that the VIB had been able to keep costs to about €1 million per record of invention, and €2 million per patent. “That’s good,” she concluded, “on a worldwide scale.” Discussion Dr. Ongena was asked if there were interactions between the VIB, IMEC, or other institutes. She said that this was just beginning, as each institute estab- lished its own technology. Multidisciplinary collaboration was becoming more and more important, she said. In the case of biotech, for example, the gene can be investigated from many points of view, from patient care to pure physics to

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11 SESSION VI: FLEMISH STRATEGIC RESEARCH CENTERS microelectronics. With IMEC they planned a collaborative project to grow nerve cells on a chip and measure electrical and chemical changes at synapse. Professor Good asked how the VIB managed its plant genetics in the face of EU resistance to genetic engineering. Dr. Ongena said it was very difficult, but they were trying. They had held an exhibition called Genes on Your Plate to explain what genetic modification is all about—that when a farmer crosses strains of corn, he is manipulating genes. FLEMISH INSTITUTE FOR TECHNOLOGICAL RESEARCH (VITO) Dirk Fransaer Flemish Institute for Technological Research (VITO) Dr. Fransaer said that his institute was unusual in the Flemish context in not having links to universities. This is because it was formed in 1988 during the nation-wide reorganization of government when the responsibility for the areas of “energy” and “environment” including the related research activities moved to the jurisdiction of the regions. What is now VITO—including materials research, non-nuclear energy, and the impact of radiation on the environment—moved from the federal government to Flanders. VITO was situated outside the capital region, in Mol, because of the possible danger of exposure to nuclear materials.32 In 1991 VITO became an autonomous public research company owned by the Flemish government. It is funded by the Department of Economy, Science, and Innovation, but more than 80 percent of its work is done for the Ministry of Environment and Energy. While the emphasis at IMEC is on cutting-edge research—7 years from the market, he said, the mission of VITO was to work with Flemish industry, and 80-90 percent of all Flemish companies are SMEs employing fewer than 50 people. So its work was practical and solution-oriented, with considerable atten- tion to the day-by-day needs of individual firms in complying with regulations and laws. Of the staff of 510, about 90 have PhDs. The work of VITO is subjected to external review, and their budget for 2006 was about €68 million. VITO’s Activities VITO’s activities span some of the most sensitive fields of R&D in a conti- nent closely concerned with every aspect of the environment: • Environment: VITO is one of the top three European centers in in-situ soil analysis and decontamination, he said, and his job is to help companies deal with contamination and compliance issues. The other areas of emphasis 32The Belgian Nuclear Research Centre is located in Mol.

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120 INNOVATIVE FLANDERS are waste treatment and reuse and air purification. The Institute is asked to help devise solutions for companies in many compliance issues, as well as to perform research at all levels. • Energy: One strategy of VITO is to develop better ways to decentralize sources of energy and move away from dependence on petroleum. Among top- priority topics are hybrid vehicles, underground natural gas storage, solar energy, wind energy, and biomass. Belgium has made a commitment to ending its use of nuclear energy by 2014. • Materials: Among the high-priority research topics for VITO are plasma- technology, laser applications, biomaterials based on ceramics and powder metal- lurgy, and “rational use of raw materials.” • Remote sensing: The emphasis here is to use remote sensing for environ- mental monitoring. • Certification: Flemish policy is to reduce CO2 emissions by 7.5 percent from 1990 levels, which all companies must follow. VITO was charged with establishing benchmarks for companies and verifying compliance. INTERDISCIPLINARY INSTITUTE FOR BROADBAND TECHNOLOGY (IBBT) Wim de Waele Interdisciplinary Institute for Broadband Technology (IBBT) The IBBT is the youngest of the four strategic research centers, said Mr. de Waele, founded just two-and-a-half years earlier. The research teams making up the virtual center, however, had been in operation for about 20 years. This center focused on ICT, but had no formal definition or limitation on the meaning of broadband. It embraced not just hardware and infrastructure but also the applications and services that reach into the community. The Need for a Foundation of Research Mr. de Waele said that the origin of IBBT lay in the 2001-2002 crash of the dot coms, which affected Flanders as it did the rest of the world. He and his col- leagues witnessed two trends: (1) The large companies with research facilities here, including Philips, Siemens, and Alcatel, all scaled down their operations; and (2) some of the local high-growth software companies crashed in spectacular fashion. Because Belgium is a small country, he said, they didn’t have the buffer of a large economy, so that when some of those companies went under, the fail- ures had a large psychological impact. In the area of ICT, they saw that it, like biotech and micro-technology, needed a foundation of ongoing research that was both market- and company-focused. “We had missed that,” he said.

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121 SESSION VI: FLEMISH STRATEGIC RESEARCH CENTERS The IBBT is based in Ghent, but has a virtual structure with research teams in the member universities. To design its programs, the founders analyzed the entire universe of available ICT research, not just the computer aspects but also legal aspects, privacy issues, patent law, communications, user analysis, and related fields. As a result of this analysis, the institute adopted the mission of develop- ing multidisciplinary human capital, and interdisciplinary, demand-driven basic research in ICT subfields. The primary focus was on ICT, software development, and broadband. They used the institute format to provide a single umbrella for available resources. The focus was on applications of wireless communications, he said, because “that’s where the future lies.” The original plan was to distinguish between fundamental and applied research but, Mr. de Waele said, “I found it impossible. All of our work is very user-driven and close to the market and companies.” IBBT started out by selecting 13 groups, with their professors and research teams, which had proven track records in both academic and business areas and experience in working with companies. The institute consisted of 100 PhD staff members and 400 researchers altogether at the universities. They had already published more than 400 papers in A-listed journals. Carrying Ideas to the Market Given the mission of carrying ideas to market, the organizers asked them- selves how they were going to put that into practice and structure their research. What domains would receive priority: the latest protocol on cable or another level in the value chain in application development? They decided to focus on finding solutions to complex problems that are not easily copied or taken to other places in world. They also wanted to help the economic fabric of the region, so they focused on health because the population is aging and ICT can play an important role in providing services. He saw this as a market-pull approach that fit global society challenges. IBBT also works on issues of mobility, new media, e-government, and enabling technologies, such as next-generation network archi- tecture. One project was to develop a communications platform for interactive home care. “Interdisciplinary, Strategic Basic Research” Most of the work was interdisciplinary, strategic basic research. They might build a platform not just as a deliverable in a bilateral contract, but as an output that could be deployed in different countries. They emphasized partnerships in areas of basic research, working in close collaboration with companies. They used a 50:50 funding scheme similar to that of the other interuniversity institutes, with good success in generating joint solutions to complex problems. They had

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122 INNOVATIVE FLANDERS launched about 100 spin-off companies, and had about 30 development projects under way. He commented that Flanders was an appropriate location for the IBBT and for ICT research in general. “Flanders is fourth or fifth in the world in Internet connectivity,” he said. “Everyone has cable.” The two largest ICT companies had a “duopoly,” he said, with one controlling cable, the other DSL. “They control the market.” The IBBT had been in existence for only 2 years, sustained by a grant of €17 million. Additional revenue came from contract research, and their target was to double the value of the grant in 10 years with their own revenue. Mr. de Waele did not foresee a dependence on the EU. “Their funding is so bureaucratic,” he said, “that it is almost more effort to get their funds than it’s worth.” IBBT did not receive extra subsidies in addition to the yearly government grant or give com- panies any money.33 Companies pay half the expenses of a joint program. Clear rules about sharing IP are set out in the contract. “We can use the IP for scientific purposes, they can take it to the market,” he said. “If they take it to market, there is some kind of return for us as well so we don’t violate EU regulations.” Using Licensing to Recoup Expenses The institute has two ways to recoup its expenses: joint development pro- grams and income from its own research that leads to spin-offs. There were then four spin-offs in the pipeline. IBBT plans to take a share of a spin-off in the form of licensing revenue. They did not want to create a portfolio of holdings; their goal was to create as many companies as possible, and recoup money only when the spin-off had real revenues. He anticipated taking only a low licensing percentage of 5 percent. “We’re basing this on what has been done at universities, and may tweak it as we learn.” Adding Value to Companies and the Flemish Economy Mr. de Waele said that the primary objectives of IBBT were to add value to companies and to the Flemish economy. They also used academic excellence indicators, but these were secondary to the number of spin-offs. They would be launching a business incubator in the next year, similar to the biotech incubator. Developing Research Consortia They also developed research consortia with companies, which so far included 86 organizations in different fields that reflected the fabric of the ICT industry in Flanders. These ranged from Cisco Systems, which employs 1,000 people in 33Companies can apply to IWT for subsidies.

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12 SESSION VI: FLEMISH STRATEGIC RESEARCH CENTERS Belgium, to a very small startup of 20 people specializing in a new protocol for sensor communication. These partnerships came about through open calls for projects, the first of which was issued just 3 months after IBBT was formed. “We just decided not to waste too much time building a strategic plan, because we had a sense of urgency,” said Mr. de Waele. They had so far done four calls, with good responses. Most of the companies responding had already worked with academic research and trusted the idea of collaboration. The next step was to facilitate the resulting consortia. The consortia were especially useful when multiple people were proposing the same idea from dif- ferent places. The consortium provided a mechanism for those people to work on the same idea but from different angles. The role of IBBT was to facilitate the dialog between companies and research teams in building the consortia, much like IMEC’s strategic programs. “We’re somewhat more market driven,” he con- cluded. “We ask the companies what their needs are, and try to pool them.” Discussion Mr. de Waele was asked whether there were any supercomputers in Flanders to support fields such as bioinformatics. He said there was a grid computing ini- tiative that was multidisciplinary in nature, facilitating not only biotech but also other disciplines. IBBT was also a member of an e-research group studying an investment plan for supercomputing and grid computing. He was also asked about the participation of foreign companies. He said that any companies were welcome to participate as long as they were active in Flanders. “We’re not too strict about that,” he said. “Our goal is to stimulate economic activity here, whether foreign or domestic. Borders are a thing of the past in terms of scientific collaboration. We just want to bring the best people together and let them work.”

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