Futures

Futures

Microsoft’s European Innovation Magazine

Issue n°7 I December 2010









Small business:

Europe’s innovation engine

Research Commissioner Máire Geoghegan-Quinn

makes SMEs top priority



Finland reinvents the university

Sixty minutes to take a start-up global

What makes Cambridge an innovation hotspot



www.microsoft.eu/Futures

Futures view



E urope is strong in science and research, but we need to

be far stronger. Global competition will challenge us in

the coming decade like never before. China outspends

most countries in the world on R&D – and it continues to raise the

ante each year. If current trends continue, China will overtake Europe

in research spending by 2020. This threat demands new thinking. I

believe the comprehensive new approach to innovation outlined by EC

Research and Innovation Commissioner Máire Geoghegan-Quinn

meets that challenge.

Above all Europe must compete more effectively for private

investment in new technologies and promising start-ups, reversing

the current decline. The challenge is finding the right mix of policy Smart homes that don’t require

and incentives. One key target should be investment and pension a genius to set up: an easy, low-

funds, which are traditionally risk-averse. They need to be encouraged cost system is about to launch in

Germany and other countries

to invest more in innovative companies. As young companies grow, will follow.

capital will flow back to government coffers through new job creation

Page 36

and taxable revenue.

Europe must also make sure inventors are rewarded for their

efforts and that their intellectual property rights are protected. This is

vital to attracting investment in new technologies – even as Europe

embraces a more open approach to innovation. Commissioner

Geoghegan-Quinn’s Innovation Union plan rightly urges the EU to

move swiftly towards a harmonised and affordable patent system.

After 30 years trying to create a single patent, the Commission has set

a deadline to achieve this goal.

Finally, Europe desperately needs education reform to inspire the

Einsteins of tomorrow and raise the skills of the European workforce.

We need more biochemists, more computer scientists and more

physicists, to enhance our ability to speed new technologies to

market. If we do this right, new skills can also pull millions out of Computer games aren’t just for

poverty and help create new jobs. kids. Fishing Cactus is designing

games that can help brain-

Many of these challenges will demand political courage and damaged patients.

leadership to break with old structures. Businesses, small and

medium-sized enterprises (SMEs) in particular, and their employees Page 40

have a huge role to play. SMEs constitute the heart of innovation in

Europe, and Microsoft is partnering with hundreds of them to help

them leverage cloud computing to innovate and expand their business

globally. This edition of FUTURES is dedicated to SMEs everywhere.









Cover photo: European Commissioner

for Research and Innovation Máire

Jean-Philippe Courtois Geoghegan-Quinn launches her plan

for an “Innovation Union”, a flagship

President, Microsoft International of Europe’s 2020 strategy.

Contents



ENTREPRENEUR’S VIEW European Research

Denis Payre on launching a start-up . . . . . . . . . . . . . . . . . . . . . .4 Commissioner

Máire Geoghegan-

Quinn tells

FUTURES small

and medium-sized

NEWS companies will be

vital to the success

Máire Geoghegan-Quinn on an innovation policy for SMEs . . .5 of Europe’s

Innovation Union.

Futures Briefing: How the EU innovation plan will work . . . . . .7

The ACES Awards: a winner visits Microsoft . . . . . . . . . . . . . . . .8 Page 7







ENTREPRENEURSHIP & SMES Why doesn’t Europe

Growing Europe’s SMEs: a question of culture . . . . . . . . . . . . . .9 produce more fast-

growing companies?

Going global in 60 minutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 It still need to get

the incentives right

A public-private project in Belgium helps IT start-ups . . . . . .16

and build a culture

British start-up Artesian taps into the cloud . . . . . . . . . . . . . .18 for entrepreneurs.

Helping SMEs access government grants . . . . . . . . . . . . . . . . .20



Page 9

INNOVATION

Finland’s model for an innovation university . . . . . . . . . . . . . . .22

Kinect brings touch-free technology to games – Finland is

reinventing the

and hospitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 university to create

Cambridge, Europe’s innovation hotspot . . . . . . . . . . . . . . . . . .31 a new generation of

creative thinkers

and innovators. And

Chinese students

take a lesson from

ENVIRONMENT Aalto.



Intelligent, energy-saving homes – a mouse click away . . . . .36

The smart way to roll out smart grids . . . . . . . . . . . . . . . . . . . .38 Page 22







A revolution in

HEALTH human-computer

controls: touch-free

Fishing Cactus creates a computer game that

technology for video

helps patients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 games. This

breakthrough can

also be used in

DIGITAL POLICY hospitals.



Education isn’t working for innovation, by Andrew Herbert . .42



Page 27



All articles are also available online at www.microsoft.eu/Futures

Colophon CONTRIBUTORS



STEVE CONNOR is Science Editor

of The Independent in London and

ENTREPRENEUR'S VIEW





Denis Payre

an award-winning science

journalist. He has also worked for

Editor in Chief, Lisa Boch-Andersen, Senior Director the Sunday Times, The Daily Business Objects co-founder Denis

Communications, Microsoft Europe Telegraph and New Scientist. Payre tells FUTURES about the risk-

taking that created France’s most

Managing Editor, Fabien Petitcolas, Director for Innovation,

MICHAEL CROSS is a London-based successful software company. In 2007,

Microsoft Europe freelance writer specialising in

technology and public policy. He Business Objects was sold to

began his career as a newspaper Germany’s SAP for €6.8 billion. Payre

reporter and has corresponded

Editorial Board from seven continents. is now President and CEO of Kiala.

Gail Edmondson, Editorial Director, Science|Business

Jan Muehlfeit, Chairman Europe, Microsoft

GAIL EDMONDSON is editorial The rewards of launching a company

John Vassallo, Vice President, Corporate Affairs, Microsoft Europe

director at Science|Business. She

Ron Zink, Associate General Counsel, Microsoft Europe covered European technology,

can be huge, but most Europeans won’t

industry and economics for Business take the risk without better incentives.

Week magazine for more than 20

years. When Bernard Liautaud and I set out to

Have contributed to this edition

create a software company in June

Maxine Ambrose, Raluca Anghel, Juan Bossicard, Helen Dunnett,

ANNA JENKINSON is a senior

1990, we had a clear vision but almost

Jessica Erhart, Claire Lee and Luca Nizzola

international journalist based in no resources – €15,000 each. We were

Brussels with 15 years of

Production experience reporting and editing in inspired by the custom software of an

Science Business Publishing Ltd Europe and Asia. Her work independent developer named Jean-

includes a strong focus on EU

research policy. Michel Cambot. As senior executives at

Layout and Design

Oracle France, we were convinced

Chris Jones, design4science ltd MICHAEL KENWARD OBE is a

freelance writer based in the UK Cambot’s code could forge a new

with nearly 40 years’ experience

Printing

covering technology and

market segment called “business

Holbrook Printers Ltd, Portsmouth PO3 5HX, UK innovation. He edited New intelligence”.

Scientist magazine throughout

the 1980s. Cambot wanted €150,000 for his

Photography

software. Lacking capital, we had to

European Union 2010, cover, p 5, p 12 (top image), p 39 PETER KOEKOEK is online news

Marco Rossi p 9 producer at Science|Business and convince him to licence it to us and trust

Jan Ferme p 13 writes on EU research, science our ability to create a market. Cambot

and innovation policy.

Philip Daly p 14 already had a cash offer for €150,000,

Aalto University Design Factory 2010 p 18-21. Aino Huovio (inset

but he finally agreed to 25 per cent of

image) p 19. Jefunne Gimpel (main image) p 19

our revenues.

Broers Building, Turnstone Estates Limited p 27

DAVID PRINGLE is a London-based Over the next nine months, Cambot

freelance writer, editor and

commentator specialising in received steady royalties, while we

Contact us technology, media and telecoms. could not afford to pay ourselves a

He is a former European

Fabien Petitcolas

correspondent for the Wall Street salary. Our cash flow went to a small

fabienpe@microsoft.com Journal.

office and our first employees. Buying

Microsoft Europe

Nerviërslaan / Avenue Des Nerviens 85 CORMAC SHERIDAN is a Dublin- an air conditioner on a hot summer day

based technology writer. He is a

B-1040 Brussels regular contributor to Nature,

drained the company bank account.

www.microsoft.eu Biotechnology and BioWorld Eventually we convinced Cambot to

International and his work has

appeared in Scientific American exchange his royalty contract for equity.

and The Scientist. The early years were all about

Circulation number / Frequency

2,500 copies / Bi-annual publication PETER WROBELis a founding resilience and survival. As soon as

director of Science|Business and French sales took off, we had to go

former managing editor of Nature,

Disclaimer the world’s leading scientific journal. global and needed venture capital. But

The content of this magazine, including news, quotes, and other He also worked as chief sub editor

at New Scientist and is a past

no European entrepreneur had ever

information, is provided by Microsoft and its third parties for your

chairman of the Association of done what we aimed to do. Luckily one

personal information only. Views imparted by third parties do not British Science Writers.

necessarily reflect the views of Microsoft Corporation. French investor said yes, and we

tackled the US market.

Copyright Microsoft 2010





PRINTED ON FSC CERTIFIED PAPER







F 4

News









An Innovation Union for SMEs



S

In October Research Commissioner mall and medium-sized enterprises – SMEs – will be the

powerhouse of the Innovation Union that the EU must

Máire Geoghegan-Quinn announced become if we are to enjoy sustainable prosperity in the face

of ever stronger global competition.

plans for the Innovation Union – a With our Innovation Union proposals on 6 October, the European

Commission is calling for a concerted drive at European, national

Europe where innovative companies and regional levels towards three broad objectives. First, to make

Europe a world-class science performer. Second, to better target

and ideas can thrive. But as she tells public sector intervention on releasing private sector potential.

FUTURES, politicians can’t create Third, to remove bottlenecks that prevent good ideas getting quickly

to the market.

this Europe by themselves: only But politicians cannot create success from the top down. Only

businesses and their employees can deliver a thriving Innovation

businesses and their employees can Union.

Some 99 per cent of European businesses are SMEs. They

do that. And almost all Europe’s account for two-thirds of jobs in the non-financial business sector.

We want to sweep away barriers that stop innovative SMEs

businesses are SMEs… reaching their potential. We want to use public policy to give SMEs a

leg up – both to allow them to compete better with larger rivals and

to put them in a better position to work with bigger companies, such

BY MÁIRE GEOGHEGAN-QUINN as Microsoft.

For example, the EU Patent, on which the Commission is urging

Member States to agree, would dramatically reduce the cost of

patenting in Europe. The Commission will also make proposals for a >>









F 5

“We want to sweep away

barriers that stop innovative

SMEs reaching their potential.”

Máire Geoghegan-Quinn Research Commissioner









>> European knowledge market for times its value in private build new markets – and SMEs in the EU’s Research

patents and licensing. This dual investment. potentially, through pre- Framework Programmes,

approach would allow SMEs both We will review the way the commercial public which are bigger and better

to patent more of their inventions €86 billion in EU structural procurement, to get support for than ever before, with annual

and to trade and exchange them funds available for research and R&D activities. funding under the Seventh

on equal terms with larger innovation for the period 2007 to Framework Programme (FP7)

companies. 2013 is being spent. One of the Simplification due to rise from about €7.5

Innovation is not only for objectives will be to use that More generally, we want billion in 2011 to about €10

technology companies. The funding better to support SMEs. national, regional and local billion in 2013.

Innovation Union is relevant for The Commission is itself taking authorities to use public Good progress has already

every type of SME: from cutting- the role of an entrepreneur and procurement – which accounts been made: 12.3 per cent of the

edge nanotech firm to the corner has proposed a major new for 17 per cent of GDP – to test FP7 money allocated by the end

shop. It aims to boost areas like approach: European Innovation innovative solutions. Until now, of 2008 had gone to SMEs. This

design and the creative sector, Partnerships. These will this has been far more common equated to a total of €930

as well as public sector mobilise stakeholders – EU, in the US than in Europe. That million. By July 2010 SMEs’

innovation, which, by improving national and regional, public and should provide further share had increased to 13.4 per

administration, can itself help private – behind well-defined opportunities for SMEs. cent, or €1.88 billion.

SMEs. goals in areas that combine Faster standard-setting – on So SMEs will be at the centre

tackling societal challenges with which we will bring forward of the Innovation Union, where

Access to finance the potential for Europe to legislation and which the they belong. And we will

Access to finance is often the become a world leader. Partnerships can also help continue dialogue with SME

biggest hurdle for SMEs. For Partnerships will step up R&D, achieve – will help SMEs. The representatives to make sure

example, EU levels of venture coordinate investment, speed up earlier there is certainty on the Innovation Union gives

capital are a quarter of those in standardisation and mobilise standards, the better SMEs can dynamic SMEs what they need

the US. We will propose a regime demand. tap into markets for new to grow – and to help Europe do

to enable cross-border venture The first pilot, on active and products and for interfaces the same.

capital funds to operate easily, healthy ageing, will aim to and accessories.

and we will appoint a leading extend by two years, by 2020, the The Commission is

figure to strengthen cross- proportion of our lives in which committed to simpler access i More information

www.ec.europa.eu/innovation-

border matching of suitable we enjoy good health. and stronger involvement of union

investors with innovative firms. Future Partnerships will

The main beneficiaries are likely cover areas such as energy,



“SMEs will be at the centre

to be SMEs. “smart” cities, raw materials,

The Commission will work water efficiency, “smart”



of the Innovation Union,

with the European Investment mobility, and sustainable

Bank to scale up our highly agriculture. For companies, they



where they belong.”

successful existing schemes should provide a clear direction

where our joint finance for of where Europe wants to be,

companies undertaking backed up with coherent support

significant but risky research and and market opportunities. There

innovation has leveraged over 20 will be chances for SMEs to









F6

NEWS







FUTURES BRIEFING







The Innovation Union – making it work

BY PETER KOEKOEK



To sweep away the obstacles to the Joint Programming Initiative.

innovation, Commission “We have the instruments; we

officials must forge agreement now have to try to let them work

on divisive issues such as a together like an orchestra. Like a

Europe-wide patent, devise a symphony, not a cacophony,”

better model for public-private says Dewar, adding that if key

partnerships and better projects lack funds, additional

coordinate a wide array of money will be found.

existing EU programmes on Despite the plan for new

innovation. Above all, the EC high-priority innovation projects,

must marshal funding in an era existing public-private

of painful budgetary restraint. partnerships such as the Joint

At a Science|Business Technology Initiatives will

roundtable on October 13 , a continue to drive innovation on a

member of the cabinet of broader spectrum.

Marion Dewar, responsible for innovation policy in the cabinet of Research

Research Commissioner Máire One knotty issue is how to

Commissioner Máire Geoghegan-Quinn, explains the Innovation Union plan

Geoghegan-Quinn, explained protect intellectual property at a Science|Business roundtable in Brussels.

how it will work. rights in an era of open

The centrepiece of the innovation. Commissioner

Innovation Union proposal is a Geoghegan-Quinn favours research conducted in Council summit a week before

new model for public-private sharing the results of publicly collaboration with private Christmas. “It is a first shot

partnerships targeted at key funded research openly. But companies. across the bow. In certain areas

social challenges such as Dewar assured industry that The Innovation Union strategy we need to drill down further,”

climate change, healthcare and open access would not apply to will be discussed at a European says Dewar.

energy. The so-called European

Innovation Partnerships will



Europe’s innovation plan called

have a direct link to senior

politicians through a steering





‘vital’ for economic recovery

board, made up of an EC

commissioner and ministers

from national governments, to

help bring down regulatory A group of European innovators according to the

barriers – something existing backs the European Science|Business Innovation

partnerships lack. The steering Commission’s new innovation Board, an independent panel of

board’s role is “to make sure plan as ‘vital’ for an economic leaders in academia, industry

that if there is an obstacle, (the recovery – but urges EU and policy. “But to make it

partnership) is tied in to the member states to follow through effective, it will need support

highest level to get it sorted on the plan with enough money from the 27 EU members –

out,” says Marion Dewar, who is and political support to make it both political and financial. We

responsible for innovation policy work. call on the EU members to formed to create an

in Geoghegan-Quinn’s cabinet. “The Commission’s make sure that this plan leads environment more conducive

The Commission aims to Innovation Union strategy is a to fast, effective action.” to innovation in Europe. Its

fund the new Innovation vital step in the process of The Science|Business members include J. Frank

Partnerships mainly through making the European economy Innovation Board is a Brussels- Brown, dean of international

existing programmes including more dynamic and competitive,” based non-profit association business school INSEAD; >>







F 7

>> Jean-Philippe Courtois,

president of Microsoft

International; Alfons Sauquet,

Microsoft plays host to French

dean of Spain’s ESADE

Business School; and David

robotics revolutionary

Eyton, group head of research

and technology at BP. big was happening.”

The panel was responding to Both companies have

the 6 October launch by Máire robotics – in Microsoft’s case,

Geoghegan-Quinn, EU the free Robotics Developer

Commissioner for Research, Studio. Gostai’s product range

Innovation and Science, of an includes Urbi, an open-source

innovation policy plan to be operating system that Baillie

discussed for adoption at a talks about as a kind of

December summit of European Windows for robotics, a

leaders. The communication, commercial developers’ product

the Board said, moves in the called Gostai Studio, and a

right direction of tackling the cloud-computing architecture,

unfavourable framework Jean-Christophe Baillie at Gostai Net, which includes an

Microsoft’s Executive Briefing

conditions of laws, regulations BY PETER WROBEL

Centre in Redmond.

application store.

and policies that hobble “One of the main issues with

innovators in Europe; and of For French robotics pioneer Gostai currently employs robotics today is the cost,” said

avoiding the fragmentation of Jean-Christophe Baillie an around 20 people, but Baillie Baillie. “Robots are still very

effort in the EU that often leads entrepreneurial adventure that has high ambitions. “Our next expensive.” Low-cost robots

to missed opportunities. began in Paris four years ago step is to release new products usually have a low-cost CPU as

But the Board also warned led earlier this year to a visit to and convince venture well, he said, so they cannot

that the plan will require many Microsoft’s R&D headquarters capitalists that we can start the carry out complex visual and

changes in national regulations in the US. robotics revolution coming into speech processing. “The idea of

and policies, and will need to The trip – part of his prize everyday life,” he said. So far cloud computing was to say we

avoid budget cuts in vital areas for winning the Microsoft IT the company has been financed can have this intelligence

of research, development and Award at the ACES Academic by business angel capital of outside of the robot, on the

innovation. Enterprise Europe Awards in more than a million euros – a cloud, and make it possible to

Solid jobs and real economic December 2009 – took him to very large sum for Europe, have an intelligent robot – using

value – the kind that won’t Redmond, Washington, in May where angel investment is intelligent algorithms – but still

evaporate in hard times – are to see at first hand how much lower than in the US. [at] low cost.”

built on new technology Microsoft is tackling robotics. That revolution is about But although there are

breakthroughs and advanced For Baillie it was also an robots entering everyday life. overlaps between the two

scientific skills,” said opportunity to meet at first “In the 1970s and 1980s companies, Baillie prefers to

Microsoft’s Courtois. “The EU hand a number of people he Microsoft brought computers talk about complementarity.

must do everything in its power had been in touch with over the into the home. We believe there “We can only hope that in the

to create the right conditions years. will be computers in nearly future we will see other large

for those new ideas and talents Baillie’s award was for every home in 20 years or so.” companies entering robotics as

to thrive.” Gostai, the spin-out company With Microsoft also working Microsoft has done…[robotics

Said Eyton of BP: "This plan he set up from his laboratory at on robotics, does Baillie see is] still at an early stage and the

is a step forward – and, ENSTA ParisTech in 2006. “The himself as a competitor? more players there are, the

hopefully, the first of many company is still in start-up Interviewed during his trip to better,” Baillie said.

such steps." mode,” he told FUTURES, Redmond, Baillie saluted the

adding that it is about to role that Microsoft has played • The next ACES awards will be



i More information

www.sciencebusiness.net/

release new products to

generate additional revenue.

in raising awareness about

robotics. When Microsoft

made in February 2011 in Zurich.



innovationboard

“We are doing well but we are

aiming at bigger growth in the

announced its interest in

robotics, he said, “Everybody

i More information

Gostai: www.gostai.com

ACES awards:

coming year.” realised that something www.sciencebusiness.net/aces









F8

ENTREPRENEURSHIP & SMES

Andreas Klinger









Growing

Europe’s SMEs:

a question of

culture

Andreas Klinger

struggled for two years

to raise start-up funds

for his Internet fashion

company, Garmz.









BY DAVID PRINGLE

Get the culture and the





A

incentives right and Europe’s

growing start-ups will ndreas Klinger’s 18-month struggle to



flourish. Get them wrong, find money for a new company helps

explain why Europe doesn’t produce more



and stagnation will continue start-ups. Klinger pursued investors for his Internet-

based fashion company across a continent, from the

no matter how many policies beer gardens of Munich to plush hotels in Moscow. “It

was a crazy circus. We had to produce our business

are in place. FUTURES plan in several languages, accompanied by 15-sheet

spreadsheets containing thousands of cells.”

investigates the challenges In June, after moving his office six times, Klinger



facing the creators of the

and his partners finally secured several hundred

thousand euros in seed funding for their Vienna-based



continent’s new companies… start-up Garmz from the Austrian government and

angel investors in Switzerland, Russia and Austria. But >>









F 9

“Changing education should

be an absolute priority.”

Denis Payre CEO of Kiala and co-founder Business Objects









>> Klinger says Garmz, which develops new financial tools to educational reform – to ambivalent attitude towards capitalism.

fashion designs based on the input of large re-energise the entrepreneurial sector “There is no proper information on how the

numbers of people viewing the designs in Europe. economy works in French schools. We need

over the Internet, now must move to Get the incentives and the culture right, to tell children they live in one of the

London in order to raise the next round of and thousands of fast-growing start-ups wealthiest countries in the world thanks to

financing needed for production. will flourish, investors say. Ignore them, innovation and entrepreneurs – and tell the

and Europe’s economy will stagnate despite stories of the people and the companies

Removing barriers a myriad of programmes to fund new that built this wealth. Transmitting these

For nearly a decade, Europe has been companies. “You need world-class values is critical.”

striving to become more hospitable to universities and entrepreneurs – and the Governments could help by creating new

entrepreneurs and small companies – the right tax incentives,” says Hermann curricula to expose students to the role of

key drivers of new jobs, growth and global Hauser, serial entrepreneur, business entrepreneurs in society at a much younger

competitiveness. Governments from Paris angel and co-founder of Amadeus Capital age – even in elementary school – and

to Stockholm have launched programmes Partners in Cambridge. “That’s where nurture the appropriate skills. The

to channel seed capital to start-ups and policies can help.” Organisation for Economic Co-operation

sponsor competitions to reward innovation. Getting the right culture starts with and Development (OECD) underscored the

But despite these efforts, Europe still lacks education. European high schools often fail need to develop the foundations for a more

a critical mass of high-growth to develop the skills, attitudes and entrepreneurial culture in its May 2010

entrepreneurs driving new ideas to market. economic savvy needed to create well- Innovation Strategy, which provides

Why can’t Europe create more fast- prepared risk-takers – the potential Bill recommendations to member governments

growth companies? It’s an old question – Gates or Steve Jobs of Europe, on forging innovation-driven economies.

but under the current pressure to revive the entrepreneurs and investors say. “Changing One key finding: primary and secondary

economy and create more jobs, it’s one that education should be an absolute priority,” schools need to adapt to a changed world

is getting lots more political attention than says serial entrepreneur Denis Payre, who and focus more on “fostering creativity,

in the past. Indeed, nurturing high-tech co-founded Business Objects, a French critical thinking, communications and

SMEs is a central theme in the European software company in 1990, and Kiala, a teamwork” – as well as “the skills and

Commission’s new Innovation Union European retail service company in 2000. attitudes needed for creative enterprise”.

strategy: “Remaining barriers for The rare references to industry in It’s no quick fix – educating a new

entrepreneurs to bring ‘ideas to market’ French schoolbooks often are negative, generation of potential entrepreneurs will

must be removed,” according to the says Payre, who in May launched a take 15 years. But Europe’s universities can

Commission’s 6 October policy manifesto. It Foundation for Responsible Growth at the start immediately developing programmes

proposed a series of measures – from new Institut de France, to examine the country’s that encourage multidisciplinary talent,







“The fastest way to start changing ideas is

a massive Europe-wide EU marketing

campaign to promote entrepreneurship.”

Mark Tluszcz Mangrove Capital Partners









F 10

ENTREPRENEURSHIP & SMES









“HP and Stanford University are

joined at the hip. We need more

of that in Europe.”

Robin Klein Index Ventures





which fosters innovation. Finland is challenge for such programmes to drive

pioneering that trend by merging three of new ideas to market.

its leading universities in economics, Major innovations that break with

technology and art and design. The new existing technology are often

university, called Aalto University, aims to commercialised by start-ups, because they

churn out a new generation of researchers, diverge from or threaten the core business

creators and entrepreneurs that of existing companies. Oracle, for example,

understand each other’s worlds (see The turned down the idea of Payre and

Finnish experiment, p22). colleague Bernard Liautaud for developing

business intelligence software. Payre and

Class B citizens Liautaud quit Oracle to found Business

Governments could also drive new thinking Objects in 1990 – against the advice of

by advertising, akin to the anti-smoking family and friends. The company grew

campaign of the 1980s. “The fastest way to rapidly becoming one of France’s greatest

start changing ideas is a massive Europe- technology success stories. It was sold in

wide EU marketing campaign to promote 2007 to Germany’s SAP for $6.8 billion.

entrepreneurship,” says Mark Tluszcz, Klein of Index Ventures says Europe

managing partner at Mangrove Capital needs to establish a department of

Partners in Luxembourg. “There is a huge entrepreneurship in every university, to

untapped pool of people who would react work closely with people who have a

positively.” successful business track record. “The

Europe’s weak entrepreneurial culture great thing is people can acquire success

also undermines collaboration between pretty young and go back again and create

industry and research universities, which other companies. Over 15 to 20 years, they

drives innovation. European companies might have set up four or five companies

need to engage much more closely with and funded 20 companies,” Klein says. “You

entrepreneurs and the universities where can breed these people; they don’t

breakthrough technologies germinate. disappear.”

“Silicon Valley is very successful at turning Countries that don’t start to nurture

engineers into entrepreneurs because entrepreneurship risk losing out on future

companies work very well with academia,” economic growth. Despite Germany’s

says Robin Klein, a partner in the London strength in science and technology, the

office of Index Ventures. “HP and Stanford lack of support for a “founder culture” and

University are joined at the hip. We need the lack of role models have meant that

more of that in Europe.” other countries often profit from German

The EU’s European Institute of breakthroughs, says Axel Polack, a life

Innovation and Technology (EIT) recently sciences specialist at Munich-based TVM

launched three consortia to promote such Capital. Alnylam Pharmaceuticals of

partnerships to drive innovation in clean Cambridge, Massachusetts,

energy, climate change adaptation and commercialised intellectual property in the

information technology. But Europe’s field of RNA interference developed partly

dearth of entrepreneurs makes it a by Germany’s Max Planck Institute >>







F 11

“There are not enough

incentives for people to

become entrepreneurs.”

Paul Rübig member of the European Parliament

Committee on Industry Research and Energy









>> of Molecular Cell Biology and Genetics At least some policymakers are hearing companies which are held for ten years.

in Dresden. that message. European Parliament Investments held for five years should

The biggest policy challenge is member Paul Rübig, member of the receive a 50 per cent lower rate. “Tax

convincing a country’s most talented Committee on Industry Research and policy around long-term investments

individuals to become entrepreneurs. Energy, argues for lower taxes on profits needs to change” if Europe wants growth

Social systems offer no safety net for those and salaries in support of young companies, says Carrano.

who take the initiative to launch new companies, counterbalanced by higher And despite a wave of new

companies and create jobs. If they fail, they taxes on consumption. “There are not programmes, Europe’s shortage of start-

have no unemployment insurance, no enough incentives for people to become up capital still hampers the ability of

pension, and no financial security. entrepreneurs,” he says. entrepreneurs to demonstrate a viable

Governments need to focus on business to venture capitalists. “If

incentives to take the risk of launching a The right incentives investors are going to risk capital, they

new company that will create jobs and Some European countries have begun to need to see more than a PowerPoint

benefit society – such as tax breaks, tinker with tax incentives. France offers a slide,” says Reshma Sohoni, CEO of

eligibility for mutualised unemployment tax break to wealthy individuals who Seedcamp, which holds an annual

insurance and pensions. “In France, people channel up to €50,000 into start-ups, competition to identify and invest $50,000

who become an entrepreneur are treated allowing them to deduct 75 per cent of the apiece in Europe’s ten hottest start-ups.

worse than people who take no risk and investment from the wealth tax. Britain Garmz was one of this year’s winners.

stay in big companies or work for the offers income tax and capital gains tax Seedcamp was set up by a group of

government. You are a Class B citizen,” relief to investors through Venture Capital venture capitalists and successful

says Payre. “That has to change.” Trusts, which are managed funds that must entrepreneurs to try and replicate the

Company founders argue that such invest in small companies to qualify for the ecosystem that exists in Silicon Valley.

incentives could pay big dividends over the tax breaks. Sohoni says that several companies which

medium term even if only a handful of fast- But venture capitalists say existing Seedcamp invested in back in 2007 are

growing start-ups reach the size of programmes fall short. Bandel Carrano, now growing rapidly, including London-

Business Objects or Google. Google, which managing partner at California-based Oak based Mybuilder, an online marketplace

was founded by two university students in Investment, says governments could for tradesmen, and Slovenia-based

1998, paid $1.68 billion in income tax in galvanise a huge wave of private Zemanta, a developer of online content

2009 on revenues of $23.6 billion. “That’s a investment in young companies by production tools.

bonanza for the US Treasury,” says Payre. eliminating all taxes on investments in new Zemanta co-founder Andraz Tori says







“If investors are going

to risk capital, they need to

see more than a PowerPoint

Reshma Sohoni CEO of slide.”

Seedcamp









F 12

ENTREPRENEURSHIP & SMES









“For high-tech, the

US is really the

endgame.”

Andraz Tori Zemanta co-founder









before attending the first Seedcamp in

2007, his company had only one customer

for its technology, which automatically

enhances text with relevant links and

photos. Winning the Seedcamp competition

gave Zemanta the capital it needed to start

adapting its Slovenian-language system for

the much larger English-speaking

markets.

That helped it garner the attention of

UK-based investors and it soon secured

more funding, followed by a cash injection

from Union Square Ventures, an early-

stage venture fund based in New York and

focused on web services. Although

Zemanta employs eight developers in

Slovenia, Tori now spends half his time in

Zemanta co-founders

Andraz Tori and Winning the Seedcamp

competition gave Zemanta

Boštjan Špeti, launch

Silicon Valley, while his co-founder is based their online content

production platform

in New York. “For high-tech, the US is

really the endgame,” he says.

Large companies such as Microsoft also

the capital it needed to

seek to support European innovation,

sponsoring competitions for start-ups. Its

start adapting its

annual BizSpark Summit showcases young

companies and brings them together with

Slovenian-language system

investors and potential partners.

But US investors still pour far more for the much larger

money into start-ups than their European

counterparts. During the second quarter of English-speaking markets.

2010, venture investors invested $7.7

billion into US-based companies in 744

deals compared with just €1.1 billion into

289 deals for European companies,

according to Dow Jones VentureSource.

“The simplest and only way to incite entrepreneurs – and keeping them on home

innovation is to make it tax efficient for the soil – it needs to put the right financial

people who provide the financing,” says incentives in place and get to work

venture capitalist Tluszcz. “Governments changing attitudes.

have tried funding start-ups, and it’s a very



i

inefficient use of taxpayer money.” More information

If Europe is serious about building http://microsoft.eu/EntrepreneurshipSMEs









F 13

Going global in 60 minutes

Need an enterprise infrastructure?

An hour should do it…

Last year one Dublin

company set out to

deliver low-cost human

resource management

tools over the Internet.

Already 30 companies

are buying into a cloud-

based service that can

let them re-create their

infrastructure anywhere

in the world.

BY CORMAC SHERIDAN









HRLocker founder John Dennehy uses

cloud computing to take his fast-growth

start-up global.

F or Irish entrepreneur John Dennehy, the

arrival of cloud computing offered a

powerful argument to launch a new

company. Dennehy was convinced that many smaller

businesses would shift to buying software and

computer services delivered and managed over the

Internet – the so-called cloud – because it would allow

them to save money, grow faster and go global at a

fraction of the cost.

“In less than one hour of engineering time, you can

re-create your company’s entire infrastructure









F 14

ENTREPRENEURSHIP & SMES









anywhere in the world,” says Dennehy, HRLocker CEO John

founder and CEO of HRLocker, a cloud- Dennehy and his team set

up operations overnight in

based computer services start-up based in China.

Cork, Ireland. In 2009, he set to work

offering low-cost human resource (HR)

management tools to companies that had

outgrown informal HR management based

on spreadsheets and paper records, but have been forced to use inferior technology Companies that use cloud services pay a

remained too small to justify the to try to compete with the biggest and best- monthly information technology bill, like an

investment of large-scale ”enterprise” funded companies in the world,” says electricity bill. HRLocker’s monthly charges

software systems. Frank Walsh, a partner at Enterprise Equity are currently under €1,000. That low-cost

HRLocker already provides HR services in Cork, which invested €100,000 in approach helps makes start-ups like

to 30 companies and expects to be HRLocker. “Now, the availability of HRLocker attractive to investors. “We’d

profitable by 2011. Early adopters range infrastructure in the cloud has levelled the much prefer to be involved in a company’s

from an Irish filling station using HRLocker playing field, giving smaller technology core technology and value creation rather

to roster its part-time staff to an companies a fighting chance against the than in building the infrastructure to start

international Fortune 500 electronics firm. big guys.” that process,” says Walsh.

The electronics company has rolled out the HRLocker also benefited from

software to 120 staff based across 14 Taking away the pain Microsoft’s BizSpark start-up programme.

countries as an alternative to adding them The cost savings for a company of The scheme provides young companies

to its existing enterprise resource planning HRLocker’s size and stage of development with free access to Microsoft development

system. are significant. Dennehy was able to avoid tools for the Windows Azure cloud-

Irish web analytics firm Bluemetrix, with the expense of buying and managing his computing platform, and to its office

offices in Dublin and Tokyo and a staff of own in-house global technology platform – productivity software. Support, training and

25, uses HRLocker for time-keeping and which would have cost several hundred business development assistance are also

holiday-tracking, and plans to deploy it for thousand euros. Instead he “rents” IT part of the package.

project management. “The implementation infrastructure from Microsoft. “It removes As Dennehy zips around the globe, he

of the software was easy and gained rapid all the pain of managing infrastructure, and embodies the virtues of cloud computing:

acceptance from the company’s we can rely on Microsoft to deal with that,” he’s geographically uncoupled and ”always

employees,” says Bluemetrix finance says Dennehy. By buying powerful software on”, answering emails sent from Europe

director John Shannon. and server capacity delivered over the instantly – while drumming up business

Dennehy spied a gap in the market for Internet, companies can better map their half a world away in China.

human resource services while managing costs to revenues. His top priority: grow the numbers. “Our

global operations for other companies. “I The shift to cloud computing also allows business model requires us to get a large

realised there were many HR issues [at small companies to decouple their service volume of users.” As sales increase,

smaller companies] that couldn’t be easily offering from a geographic location. One- scaling up its infrastructure is not a

solved,” he says. year-old HRLocker is already marketing problem. HRLocker can upgrade any time

A serial entrepreneur who founded throughout Europe and Asia. While in China to more powerful software and server

Upstart Games, Dennehy launched recently, Dennehy was able to show capacity — and enter far-flung markets the

HRLocker with €50,000 of his own capital HRLocker’s software to potential clients by minute Dennehy clinches a deal. For start-

and €250,000 in seed funding from Irish tapping into a Microsoft data centre in Hong ups, going global is now a more viable

investors including Enterprise Ireland, the Kong with no need for remote deployment, game.

state economic development agency. The configuration or testing. “Our solution has

company’s venture backers saw to be available everywhere, and cloud

competitive advantage in a business model

offering cloud computing services to

computing avoids the need to install

servers in other people’s premises, which

i More information

www.microsoft.com/bizspark/

www.hrlocker.com

smaller companies. “Two or three years is a nightmare to manage.” New software Contacts:

ago, start-up technology companies would versions can be rolled out in real time. bizspark@microsoft.com









F 15

Back to boot camp

Fitness training

for new enterprises

Many high-tech incubators have BY ANNA JENKINSON



had disappointing results.

B

elgian IT engineer Didier Beka

Microsoft’s Innovation Centre in had a new idea: software that

would enable people with hearing

Mons, Belgium, thinks it has found or speaking disabilities to



the best way of helping budding

communicate by telephone. Beka knew he

had the technical expertise to develop the



companies: high-quality coaching product but he lacked business experience

to build a company around it. “I needed



and mentoring. commercial advice,” he says.

To get it, he signed up in 2009 for a six-

week entrepreneur’s boot camp at the new

Microsoft Innovation Centre (MIC) in the









F 16

ENTREPRENEURSHIP & SMES







including advice on improving his product levels of support for potential

and his pitch to potential industry partners. entrepreneurs: brain-storming with

For the Walloon government, which is experts; free facilities, software and

investing €1.5 million in the Microsoft coaching; and a boot camp to groom

Innovation Centre over the next three years, start-ups for survival.

supporting entrepreneurs like Beka is a Pieter Eerlings, who heard about the

way to tackle double-digit unemployment. Microsoft Innovation Centre on Twitter,

The government’s goal is to help create 250 used it to shape a business idea for online

jobs through the centre during the three- ticketing software. Eerlings received advice

year period by seeding new information on marketing his application and pitching a

technology companies. Microsoft operates business plan to venture capitalists. Many

about 100 similar innovation centres entrepreneurs think, “Once I have my

around the world as part of a public-private software, I’ll have thousands of people

partnership strategy which helps grow the downloading it,” says Eerlings. “It’s not

IT industry and widen the potential pool of true. You need to find a way to sell.”

clients for software and services. When Eerlings attended the boot camp

So far, some 38 start-ups have gone in 2010 his service, called Fikket, didn’t

through the Mons boot camp, with one- have any sales. The product now has 350

third starting businesses and another third customers and Eerlings expects to turn a

working on improvements. The remainder profit by year end.

have shut down. “It goes without saying Microsoft was surprised by the start-

that some start-ups will fail, but our ups’ demand for information about best

ambition at Microsoft Innovation Centre is practice in the software industry, as

to fail quickly if they must fail, or to adjust opposed to basic help with technology. “We

quickly if they must adjust,” said Ben thought it would be 50:50, whereas it’s

Piquard, head of the MIC in Mons. actually about 20 per cent technology and

80 per cent best practice,” says Piquard.

High-quality coaching “They know our technology. They want to

Many incubators offer entrepreneurs cheap learn how to be successful.”

office space with poor results. High-quality Microsoft and the Brussels regional

coaching and mentoring are vital forces government are now planning an MIC in

driving entrepreneurship in Silicon Valley Brussels, for early 2011. And the Walloon

and Cambridge and are key to helping region is launching another project in Mons

start-ups survive. “This (coaching) idea was to support green entrepreneurs this year:

the most striking and the most immediately the Euro Green IT Innovation Centre. The

actionable” to help increase the number of Walloon government is financing half this

entrepreneurs in the region, says Pierre project with a €750,000 investment. Private

Leclercq, a representative of the Walloon partners IBM, Cisco, Microsoft and Climate

government. Savers Computing Initiative are providing

Belgian town of Mons. A joint initiative with The initiative is predominantly aimed at the other half in the form of personnel,

the regional government of Wallonia to seed entrepreneurs in Wallonia, but all Belgian consultancy, infrastructure and investment.

new information technology companies, the residents can take part. About half the The centre aims to develop up to ten new

innovation centre offers coaching for start-up ideas relate to eHealth (the companies a year, creating 250 jobs by

entrepreneurs. application of computer technologies to 2012, and improve Wallonia’s technical

Beka arrived with a software program health), a key focus of the Mons centre. skill base.

designed for use with a personal computer. Other ideas apply information technology If such public-private partnerships can

He left realising that to be commercially solutions to the hotel and catering industry deliver on those ambitious goals, the public

successful, he needed a mobile version that and fleet management. The IT industry investment will pay economic dividends for

could be used from a cell phone. requires a very different business plan from years to come.

Now Beka is racing to finish the mobile other sectors, Piquard notes. “What is

product, called Vivatel, for launch in January

2011. “The boot camp allowed me to run

needed the most is IT business advice,”

he said.

i More information

www.mic-belgique.be

Contact

through everything from A to Z,” he says, The Mons innovation centre offers three info@mic-belgique.be









F 17

Into the cloud,

BY MICHAEL CROSS







For web

I

customers via a web browser, instead of

from hardware and software that is

t’s nearly impossible for companies installed on a company site. “So far it’s



entrepreneur to stay on top of the explosion of

useful information about markets,

working fantastically well,” says Yates, who

recently won his first US-headquartered



Andrew

competitors and customers that crops up global customer without ever meeting the

daily on social media and other websites. management face-to-face. Artesian, a

But that’s also a business opportunity – member of Microsoft’s BizSpark start-up



Yates cloud and one seized by British start-up,

Artesian, which seeks to transform the

programme, has grown quickly to 22

employees and expects sales of two to



computing

torrent of web-based information into a three million dollars by the end of the

wellspring of business intelligence. company’s fiscal year. Yates believes he can

The firm’s software, which went on the double sales in the next two years.



offers an market in 2008, sifts through the millions

of references published every day on the Gaining the advantage



entirely new

web and delivers up a digestible portion of For a start-up offering new services, the

sales intelligence solutions to busy cloud computing model has a key

executives who need to stay abreast of key advantage: it’s easy for prospective



way of doing topics for sales leads. Chief executive

Andrew Yates, who founded the company

customers to “take a test drive” and see

how a new product could help their



business.

in 2006 with two former colleagues from business. “In a traditional sales situation,

the business intelligence firm Cognos, [software companies] never let you get your

likes to describe his business as giving hands on the product. We encourage



But it’s not customers “a sip from the fire hose”.

Artesian’s software scans the web and

customers to do it as early as they can,”

Yates says.



without its

social media for information that might be For Yates, cloud computing offers more

relevant to corporate sales teams and than just a convenient way of hosting

refines tens of thousands of items down computing power. The new architecture for



pitfalls… to a 15-minute briefing that can be sent to

an executive’s mobile phone or other

software services creates an entirely new

way to engage with customers and build a

device every morning – creating a next- business. “Ten years ago, if you wanted to

generation corporate information system. try new software you’d have to go to the

Large customers such as Barclays may information technology department and be

receive 50,000 mentions on the web every trained on it. Now you just click on the link

day. “We remove the pain and cost of and you’re off. There’s nothing to install, no

filtering the web,” says Yates. need for training, no security issues: you’re

Artesian is a pioneer in the shift toward up and running.” This makes for a faster

cloud computing, where technology sales cycle and painless scaling up. “If I

services and resources are delivered to want 1,000 people to use it, I just give them









F 18

ENTREPRENEURSHIP & SMES









carefully

1,000 passwords,” Yates says.

But Yates cautions entrepreneurs

contemplating a business based on a cloud

computing model in Europe to get savvy

about the legal, commercial and technical

pitfalls before plunging ahead. In

particular, he warns of the potential

danger of delegating responsibility for the

where to hold the data as well as the level

of security needed. For some customers,

“Artesian could

service to a third party, such as the cloud

provider. Relying on a third party exposes a

the level of security provided by smaller

cloud vendors may not be sufficient,

not have grown

company to the risk of being held liable for

events over which it has no control. “You

he says.

The choice of cloud service vendor is the so quickly had it

can’t guarantee the Internet,” Yates warns.

Contracts must treat Internet

second key issue. “When you put your

application into the cloud you become relied on

interruptions as “force majeure”.

Another potential legal minefield,

inextricably linked to the vendor you

choose,” says Yates. The cloud offers great traditional

especially in Europe, is the question of who

regulates the cloud. Rules governing

opportunities to scale applications and to

reduce costs but it also removes certain architectures and

security and protection of data may

depend on where the server is physically

things from a company’s direct control.

“Make sure that you read the small sales cycles”

based. Companies may want assurances print,” Yates says. The crucial thing is to

that their data will be held within the EU. remember that some downtime is Andrew Yates Artesian

inevitable and the service-level agreement

The difference with the cloud vendor must be aligned to

The process of developing products is also the service-level agreement with your

significantly different in the cloud, Yates customers. For example, it would not be

says. It is important to have a mechanism advisable to have a four-hour response first million dollars of revenue with no

for developing and testing code in an time with your cloud vendor but to offer external funding. “We see a $1.1 billion

environment that represents reality, not your clients a two-hour limit. Yates started market opportunity,” he says. If Yates

just the one most convenient to the out on a .NET Framework, which shares makes good on his vision of superheated

business. It is also vital to be able to many features of cloud computing, and growth, a new generation of European

deploy new code rapidly to fix bugs or began migrating to Microsoft’s Windows start-ups will not be far behind him.

upgrade software. Azure cloud platform in May.

When moving one’s business to the Despite all the new legal and technical

cloud, he says, companies should consider

two key questions. The first is security.

issues linked to cloud computing, Yates is a

fan. “Artesian could not have grown so i More information

www.microsoft.com/bizspark

www.artesiansolutions.com

Companies must figure out how users will quickly had it relied on traditional

Contacts

authenticate themselves, how to provide architectures and sales cycles,” he says. bizspark@microsoft.com

access rights and support services, and Artesian bootstrapped its growth to the www.artesiansolutions.com/contact









F 19

Show me the money

Tapping into Europe’s

funding streams

Looking for technology support and

not sure how to fund it? The EU Grants

Advisory can help take the strain out

of accessing the money that

governments set aside to help

start-ups and SMEs.





G overnment grants are often

so complex and costly to

obtain that small companies

never bother. The EU offered more than

€200 billion to small businesses for

technology and related investments

business development.

EUGA’s partner consultants help start-

ups and smaller firms identify the right

grant and guide them through the

application process. The service is

available in 14 countries, with more

support. EUGA then helps promising young

companies secure the capital vital to

growth. The EUGA team collaborates

closely with investors to help start-ups

identify and secure financing. The

European Business Angels Network and

between 2007 and 2013, but much of the planned. This autumn, Microsoft Finland the European Venture Capital Association

funding has yet to be spent. Less than half began to offer EUGA services to members both play an active role in promoting EUGA

of all potential recipients are aware of the of the local Microsoft BizSpark through events and publications.

programmes and only a handful actually programme, which supports start-ups Government grants help angel and venture

apply for funds. Those who do often fail. worldwide. More than 10,000 high growth investors mitigate their own risk by

Perplexed managers can hire a grant companies have joined BizSpark in Europe. enlarging the source of growth capital for

advisor, but their fees can be steep – and “By helping small companies to raise start-ups and accelerating their

fraudulent advisors are a problem in grant funding from the EU and national development.

some countries. sources, they can invest in people and in a

The long-running dilemma prompted technology roadmap that otherwise they Proven track record

Microsoft to create the EU Grants Advisory may not have been able to follow. This The success rate for grants applied for with

(EUGA) in 2005, in partnership with HP, helps them accelerate growth and reduce EUGA’s help since 2005 is 80 per cent, and

Intel and the European Software the risk of failure,” says Cliff Reeves, the service has secured nearly $510

Association. EUGA gives free assistance General Manager, Entrepreneur million. At a grass-roots level, it has helped

to small and medium-sized businesses Community Development. create 40,000 new jobs and trained 135,000

(SMEs) seeking local, national and EUGA is part of Microsoft’s strategy of workers.

EU level grants across many sectors, partnering with small companies to help One successful grant winner is Paris-

with a strong focus on research and them grow. The tandem starts with based Feedback&Co, a provider of

development, training, employment and providing entrepreneurs with technology enterprise feedback management









F 20

ENTREPRENEURSHIP & SMES







EU Grants Advisory gives grant winner

TeamNet an award for excellence in

e-government and e-health projects (far left).



EUGA France consulting with companies (left).









Eight top tips for success

1. Assess your chances of success – a EUGA consultant can help

select grants you are most likely to secure.

2. Be specific. Define a project that you really need help with.

Don't apply for general financial support.

3. Have clear goals and targets against which the success can be

measured. Metrics help your case.

4. Be sure of your commitment. Even with a EUGA adviser, you

will still need to put time and effort into the grant process.

5. Figure out the financing – grants often cover only 50 per cent

or less of the total project.

6. Have a contingency plan – line up alternative funding in case

your application is not successful. Don’t leave it until the last

minute.

7. Prepare a clear business plan – Microsoft can help. Back it up

with clear research, facts and figures.

8. Don’t start your project until you have the funds – it can take

months for grant money to arrive.







software, which enables centralised over one million euros to set up the system to manage the production process

management and deployment of surveys programme, including fund for six ICT effectively. A local EUGA consultant

organisation-wide. Although Feedback&Co employment specialists. Rade Azaric of suggested Fresh-Up might be eligible for

had a strong existing business foundation Arbetsförmedlingen says, “There is a lot of external funding for the new system and

in France, it needed capital to develop new work involved in applying for a grant and helped it apply to the Bulgarian Ministry of

products and expand into international EUGA has considerable expertise and Economy and Energy for a Modernisation of

markets. success in this area.” EUGA also helped Manufacturing SMEs grant.

A EUGA team in France investigated the the agency to gather input from Microsoft EUGA managed the application process

grants best suited to Feedback&Co and partners – as potential employers – to end-to-end, and the ministry awarded the

recommended PM’Up, a scheme strengthen the case for the grant company €50,000 – roughly two-thirds of

administered by the Paris region to help application. the total project cost. Thanks to the grant,

local SMEs fund marketing, commercial Fresh Up has been able to grow operations,

and international development. The Fresh-Up Label, Bulgaria boost production and secure its position as

research paid off: Feedback&Co won a Wielding information technology to help a one Europe’s leading providers of labels.

three-year €85,000 grant. company grow is a challenge even at big “EUGA’s expert team were in the best

companies. But for small firms, daunting position to advise us which grant we would

Swedish employment skills investment challenges can stunt be most successful in securing,” says

EUGA also helps public and private development. Fresh-Up Label, a fast- Borislav Banchev, CEO of Fresh-Up Labels.

agencies apply for funding that in turn help growing Bulgarian company, hit the wall “Working with EUGA removed much of the

young IT companies. Arbetsförmedlingen, a several years ago as international demand workload and complexity that would

nationwide employment agency in Sweden, for its high-quality, pressure-sensitive otherwise have been involved.”

wanted to improve the IT skills of 150 job adhesive labels drove demand for rapid

seekers by July 2011, but lacked the product turnaround.

financial resources. With EUGA’s help, To continue its international expansion,

Arbetsförmedlingen received a grant of Fresh-Up Label needed an electronic i More information

www.microsoft.eu/euga









F 21

The Finnish experiment

Aalto: the university

re-invented

Finland has set out to create a university that has innovation

built into its foundations, merging three institutions into one

along the way. Is Aalto a model for universities in other

countries? FUTURES heads north to find out.









“We’re looking for

challenges that are

a ‘mission

impossible’ – where

the risks or the

costs are too high

for anyone else.”

Kalevi Ekman professor of engineering and

director of Aalto’s Design Factory



Design Factory – Mission









“A passion-based co-creation pl

F 22

INNOVATION









BY GAIL EDMONDSON









I

“We need to teach students how to

t’s a brisk autumn afternoon in

be critical and solve problems.”

Finland and managers from 19 Tuula Teeri president of Aalto University

companies have just arrived on the

wooded Aalto University campus near boundary-smashing approach” will help the impossible” innovation challenges posed by

Helsinki in search of young innovators. university to a place among the world’s top companies. The 4,000-square-metre

Each manager will have five minutes to universities – and seed a new generation of Design Factory is their extended classroom

convince students to tackle their real-world innovators. – a hub of innovation, meeting rooms and a

engineering and design problems. “We’re The centrepiece of a radical education cutting-edge prototyping laboratory with

looking for challenges that are a ‘mission reform in Finland, Aalto was created to everything from computer-aided design to

impossible’ – where the risks or the costs groom graduates for a world transformed by an electrical workshop.

are too high for anyone else,” says Kalevi technology, information overload and global

Ekman, professor of engineering and competition. “We need to teach students Exactly what business needs

director of Aalto’s Design Factory, which how to be critical and solve problems,” says Students steer the projects with guidance

hosts the annual matchmaking event. Tuula Teeri, president of Aalto University. from academic and company advisors. They

Aalto’s hands-on Design Factory is a “Building more lecture halls is not the way are free to seek out experts across the

showcase for Finland’s bold new to move forward in an information society.” three campuses – in everything from

experiment in higher education. Officially European Union Commissioner Máire industrial design and architecture to

launched in September 2010, Aalto Geoghegan-Quinn has lauded Aalto’s new computer science and electrical

University merges three major Helsinki approach. In a 6 October Innovation Union engineering. They also choose the

universities in technology, art and design, communication, she points to Aalto as a problems the want to solve: companies that

and economics. Its mission: a radical shift model for Europe to bridge the gap between don’t make a convincing pitch won’t get a

toward multidisciplinary learning. Finland academia and business, to produce team. Nokia challenged students this year

is betting that by 2020 Aalto’s self- graduates with skills that better match to tackle design problems with mobile

proclaimed “open-minded and industry’s needs. phone accessories.

In Ekman’s one-year master’s course on At the same time, Aalto researchers









latform”

product design, 140 students in engineering, have set up shop in Design Factory to study

design and business form 15 cross- innovation in progress, while companies are

disciplinary teams to tackle the “mission free to collaborate with professors on >>







F 23

“All you need is love, design,









Design Factory.







>> projects. “Aalto is exactly what business for Vaisala, a Finnish weather forecasting arguing that the country’s system of higher

needs – it doesn’t need more technology company. education had become a bureaucracy

programmers. It needs people that work in The idea for a Finnish “innovation driven by civil servants, and was in danger

global teams and get over the silo university” was first broached in 2005 by of sapping Finland’s competitiveness. The

mentality in organisations,” says Bruno Helsinki University of Art and Design manifesto sparked two years of heated

Lanvin, director of INSEAD’s E-Lab Rector Yrjö Sotamaa, who said integrating national debate on university reform.

research centre in Fontainebleau, France. technology, business and design was vital Finally in 2007, the government voted to

“Aalto’s cross-disciplinary approach to driving technology-based innovation. back a national innovation university and a

addresses so many things that are missing Finland’s primary and secondary schools new statute for public-private universities.

in European universities. It’s a huge already lead global rankings in excellence “We were looking at global developments

learning opportunity for Finland.” in education, but the country’s universities in China, India and elsewhere and thought

Companies like the model: nearly 20 were small and weak in international if we stand still, we will be left behind,”

firms line up each year to engage student comparisons. Finland’s fragmented said Heljä Misukka, state secretary in the

teams despite a €15,000 sponsorship fee, university landscape lacked critical mass in Finnish Ministry of Education.

which covers the cost of the research but research. Successful global products like Apple’s

does not include any guarantee of success. Sotamaa won over the rectors at the iPhone helped Aalto’s backers convince

Last year’s class developed 13 new Helsinki University of Technology and the sceptical university staff to break down the

products including a portable terminal to Helsinki School of Economics. The three educational barriers between technology

gather weather data in extreme conditions launched a manifesto for university reform, and design and create joint advanced









F 24

INNOVATION









engineering and business”

Design Factory – How they work



“The EU can absolutely

benefit from this kind of and heart rate signals.

Fabrizio Gagliardi, director of external

multidisciplinary approach.” research for Microsoft in Europe, Middle

East and Africa, says Aalto’s joint expertise

Fabrizio Gagliardi director of external research for in computer science and design is unique.

Microsoft in Europe, Middle East and Africa “The EU can absolutely benefit from this

kind of multidisciplinary approach,”

he says.

A key element of the reform

degrees. “The government saw this as a of computer science at the University of spearheaded by Aalto is a voluntary shift in

way to find new fields of growth,” says Helsinki, who will lead the research team higher education to a public-private

Misukka. “We think investing in education at Aalto. funding model. With founding capital of

is the best policy to ensure Finland can The study involves design, computer €700 million – €500 million from the

compete in global markets – which is science, anthropology and sociology, and government and €200 from the private

tougher and tougher.” the Aalto team will collaborate with sector – and an annual budget of €368

researchers at the Microsoft laboratory in million, Aalto has financial critical mass to

The EU can benefit Cambridge. “We need to break the rules hire top researchers, provide a competitive

The innovation university was eventually about how we think web search works. tenure track and fund new programmes. To

named after Alvar Aalto, the influential Maybe we don’t need a computer to do encourage the shift, Finland granted tax

Finnish architect, designer and engineer search at home,” says Jacucci. Aalto relief to companies and individuals who

known as “the father of Modernism” in researchers already are working on would back Aalto, and it enlisted one of

Nordic countries. Many of Aalto’s clients interactive home artefacts, such as coffee Finland’s wealthiest industrialists – Antti

were industrialists, and whether designing cups that warm themselves or signal Herlin, owner of Finnish elevator company

buildings, furniture or glassware, he spent when they are empty, and chairs and Kone, to lead a private fund-raising effort.

his life exploring a multidisciplinary sofas that can capture breathing The Finnish experiment in cross- >>

approach to problem solving,

With the mandate to reinvent university Student trip to Shanghai.

education, a working group of rectors,

professors, students and Finnish

companies benchmarked the best

universities in the world, including Stanford

University, the Massachusetts Institute of

Technology (MIT) and the University of

Cambridge. They also met with global

technology companies to understand what

would make Finland’s new innovation

university an interesting partner for

business.

In June, Microsoft Research agreed to

fund two projects. One will focus on radical

new concepts for web search at home.

“The idea is to break with the office

orientation – in the home there are

different ways of sharing and searching for

information,” says Giulio Jacucci, professor

of design research at Aalto and a professor









F 25

“Out of 400 boot camp

applications each year,

we hope to get eight to

Silicon Valley.”

Kristo Ovaska Venture Garage founder









>> disciplinary innovation is already is quickly topped 5,000 members. But the global giant, Nokia. “What has amazed me

inspiring universities around the world. turning point came in 2009 when Ovaska is the speed of change,” says Antti Aarnio,

This spring China’s Tongji University set up convinced Aalto to grant €500,000 to business development manager at Aalto’s

a joint Design Factory with Aalto in establish Venture Garage, a hub for new Centre for Entrepreneurship, which

Shanghai, based on the Helsinki model. entrepreneurs and start-ups. At the opens officially in 2011 and aims to draw

The buzz about Aalto’s Design Factory suggestion of a professor, Ovaska set up a company founders throughout the Baltic

started in 2008 when it was set up as a trip to MIT and Stanford to immerse a group region.

forerunner programme, two years before of Aalto students in the world’s most Finland’s government has even begun

the three universities merged. Now a dozen vibrant innovation ecosystems. The Venture fostering entrepreneurship in elementary

universities from Australia to Brazil are Garage group established vital links to US and secondary school education as part of

seeking to partner with Aalto to create investors and entrepreneurs which are now ongoing national reform of curricula to

Design Factories of their own. helping Finnish companies get off the ensure the country has a workforce with

“China produces half a million masters ground. skills needed in the future. “Students need

in engineering a year. We produce 500. For One is Finnish start-up AudioDraft, a to know how to collect knowledge and

Finland to be globally competitive we need year-old company housed in Venture analyse facts, not just learn facts,” says

to go beyond technology and combine Garage, whose co-founders have been to Misukka. Finnish teachers encourage

disciplines, mastering the design side of Silicon Valley three times over the past children from 8 to 12 years old to come up

innovation,” says Ari Rahkonen, general year, thanks to the initial trip led by Ovaska with ideas for new products and new

manager of Microsoft Finland. in October 2009. In April, AudioDraft companies – and to consider production

secured $170,000 in angel financing, and it cost and profit.

A hub for entrepreneurs won its first customers in July. “The culture Several challenges remain. Aalto needs

Another Aalto innovation that has gone for entrepreneurs has been changing a lot a more international student body. Only ten

global overnight is Venture Garage. A in Finland and it’s all thanks to Aalto,” says per cent of Aalto’s staff and student body

student initiative launched in 2009 to AudioDraft co-founder and chief executive come from outside Finland, despite many

support entrepreneurs, the 700-metre red- Teemu Yli-Hollo. courses and degrees being offered in

brick industrial hall next to Design Factory Sporting a black tee-shirt, rumpled English. The Finnish government aims to

has become the centre of Helsinki’s blond hair and jeans, Ovaska introduces a measure the success of Aalto by tracking a

growing entrepreneurial community, team of seasoned entrepreneurs for number of criteria, including Aalto’s ability

drawing hundreds of entrepreneurs, Venture Garage’s next bootcamp and to draw a growing number of foreign

investors and students to weekly events. exhorts a team of 10 would-be students and leading foreign researchers.

For Aalto business student and Venture entrepreneurs to work their tails off over Teeri insists the key ingredients for

Garage founder Kristo Ovaska, the change the coming two weeks. “Out of 400 innovation are freedom and talent. “The

couldn’t come fast enough. “We were angry bootcamp applications each year, we hope challenge in Europe is to stop planning,

back in 2008. There was no culture and no to get eight to Silicon Valley,” he says. stop making structures and spread good

support for entrepreneurs in Finland.” Out Aalto’s goal is to seed 100 companies ideas. It’s important to have the best

of frustration, Ovaska launched an Aalto that grow to $100 million in sales, to ease people and let them do what they want.”

entrepreneurial society on Facebook that Finland’s economic dependence on its one Aalto has already got that lesson down.









F 26

INNOVATION









Hands off

The touch-free

BY STEVE CONNOR

revolution in

I n Steven Spielberg’s 2002 film

Minority Report, police chief John

Anderton, played by Tom Cruise,

rifles through a set of computer files by

simply moving his hands through the air.

The film is set in the year 2054 when the

gaming

“no-touch” man-machine interface is

routine technology. In fact, the no-touch

computer interface is already here and it’s

called Kinect, offering a new way of playing

computer games by moving parts of the

body in free space.

Today’s computer games depend on

hand-held controllers that respond to

touch. Kinect does away with any physical

connection to the video game processors

controlling the screen. Instead, the players

are lit up with an invisible infrared beam

sent from the machine’s projector and their

body movements, reflected in the infrared

light, are captured by a 3D camera. The

result is that body movements alone can be No mouse. No joystick. No keyboard.

used to control the game: swing your right

arm in your living room to return a ball on a No touch screen. Now you can play

screen version of Wimbledon, or kick your

left leg and deliver a kung fu blow to the games without a physical connection

vitals of your mortal enemy.

Kinect, launched in the US and Europe in

to a computer. But it’s not all fun –

November as an add-on peripheral for

Microsoft’s Xbox 360 game console, marks

the ripples from the revolution in

a turning point in computer interaction.

“It’s a truly new way of interacting with

hardware and software behind

games,” says Giulio Jacucci, professor of Microsoft’s Kinect could spread to

design research at Aalto University in

Helsinki. hospitals and beyond.

Other companies are vying to advance

gaming technology, notably Sony with a >>









F 27

been trying to do for a good twenty years,”

he says.

The no-touch technology involved two

major breakthroughs: a 3D camera and

sensors that could track the entire human

frame; and algorithms and machine-

learning techniques to interpret the images

in real time – allowing programmers to

build games based around those

movements.

The potential for that technology goes

far beyond games. Kinect’s underlying

machine-learning and image analysis

algorithms could be deployed in a variety of

settings where handling a physical object is

dangerous or difficult, such as battlefields

and sterile operating rooms. Image









>> new motion-controller called Move for its

PlayStation 3 and Nintendo with its Wii

Remote and MotionPlus. All three are

hoping new control technologies will

galvanise the video game market. Microsoft

expects to sell more than three million

units of the Kinect console by the end of

the year.



New control

“This is a radically new way of controlling a

computer,” says Andrew Blake, managing

director of Microsoft Research in

Cambridge. Blake, an expert in artificial

intelligence and a former University of

Oxford professor of engineering science

who leads the computer vision team that

developed Kinect, compares its motion-

capture technology with the arrival of the

touch-screen revolution more than a

decade ago. Touch screens were invented

in the 1980s but only recently taken into

commercial products. “It is quite new both

in terms of what’s out there in the market

and the underlying technology. The

technological achievement is something

that the computer science community has









F 28

INNOVATION







recognition algorithms similar to the ones

developed for Kinect are also being “The technological

achievement is

harnessed to automatically interpret

medical images. Microsoft researchers in



something that the

Cambridge are working with physicians to

develop a software platform that will

automatically analyse computer

tomography (CT) and magnetic resonance

images to speed up the process of

computer science

diagnosis.

Hollywood already works with expensive

community has been

motion-capture technology, using

computers that augment the movements of

trying to do for a good

people in a digitally enhanced landscape.

But the technique requires actors to wear

twenty years.”

tight-fitting body suits that mark all their

limb joints. Kinect relies on “markerless” Andrew Blake managing director of Microsoft Research in Cambridge









motion capture, Blake says. Academics

have been trying for years to make

markerless motion capture work and one of

Blake’s insights was to realise that a 3D

camera could make a huge difference.

Traditional motion capture relies on

clever computer graphics, but this

approach has inherent limitations. The

Kinect team at Microsoft solved some of the

fundamental problems with the help of

advances in machine learning. It was

marrying the two approaches, computer

graphics and machine learning, that led to

the breakthrough in Kinect’s development,

Blake explains.

The computer graphics approach

simulates inside the computer what the

shape of a body should be when its joint

angles have a particular value, and that

shape is compared with the actual shape of>>







F 29

>> the body seen by the camera. The idea Blake’s team got around the problem by Once you’ve done that, then that is your

relies on comparing a shape in the combining machine learning with computer answer – your updated pose. But because

computer’s memory with a shape that vision. “It was the magical combination of you are only doing limited, local searches,

comes in from a 3D camera to see if those two that has really made everything there is a risk of the machine losing you,”

they match. work,” he says. he says. “The machine-learning approach

“If they don’t match, you know you have Jamie Shotton, a University of Cambridge does not use any temporal information. It

to adjust something,” Blake says. “Then it’s researcher in computer vision who joined will tell you which parts of the image

a matter of using optimisation algorithms Microsoft to work on the machine-learning belong to which part of the body for any

to decide what adjustment to make to the problem with Blake, points to another given frame,” he explains.

simulated shape to bring it into alignment.” problem with the computer graphics That’s why a Kinect console takes less

approach. “Different people have different than 2 milliseconds to determine which

Alignment issues shapes and sizes so if your dummy doesn’t part of the body is moving. It is as if the

But there are a number of problems with match your shape and size, it’s going to computer is really watching your

computer graphics. One centres on the struggle to lock on there as well.” movements and responding to them

need to align the actual image picked up by “The machine-learning approach takes a instantly, Shotton explains.

the 3D camera with the images of the very simple algorithm and lets it learn by Despite 20 years of toil, the R&D

simulated shape or the “tailor’s dummy” if example. That means showing the machine investment in computer vision technology is

you like. “If they are not approximately in hundreds of thousands of different poses coming to fruition more than 40 years

alignment, if the tailor’s dummy is on one and people to get the machine to do the before the 2054 dateline of Minority Report.

side of the room and if the real 3D data is on number crunching and work out what those And the payback has only just begun.

the other side of the room, if there is no rules should be,” Shotton says.

contact at all, no matter how much “The graphics approach requires that you



i

wriggling the dummy does, you won’t sense know roughly where you are already. You More information

any improvement,” Blake says. then move until another match is found. www.xbox.com/kinect









F 30

INNOVATION









The cluster recipe

How to emulate Europe’s

most famous innovation

hotspot Take one world-leading university, add

a few investors and start-ups, sprinkle a

BY MICHAEL KENWARD

few government grants. If only

replicating Cambridge’s success were



B

illy Boyle is the kind of

entrepreneur European policy that simple…

makers would love to clone.

Working out of a basement lab at

the University of Cambridge, Boyle and two now employs 40 people and its order book Boyle’s is the kind of success that has given

fellow chemical engineers pioneered a includes a $4 million contract from the US rise to the “Cambridge phenomenon” – the

sensor system on a microchip to detect toxic Department of Defense. city being a place where innovation just

gases and compounds used in explosives. As governments across Europe struggle seems to work.

Their six-year-old start-up, Owlstone Ltd, to nurture innovation and entrepreneurship, Cambridge makes it look easy. Though >>









Department of Physics, Broers building for

Cavendish Laboratory commercial R&D







Centre for the Physics of

Medicine









Nanoscience Centre





William Gates Building, the

computer laboratory









Microsoft Research

Centre for Advanced

Photonics and Electronics









F 31

No shortage of start-up financing for scientist









The Mathematical Bridge at Cambridge, built

in 1749 by James Essex.









>> it still can’t match Silicon Valley’s roster of that Stanford is the world’s most prolific say Cambridge has the key ingredients to

home-grown global technology champions, source of innovation-based companies, a drive innovation: a deep pool of world-

it is by far Europe’s most successful 2007 Library House report concludes. class scientists and researchers, strong

innovation ecosystem. The traffic-choked California also benefits from eight times as links between the university and business,

zone around the University of Cambridge much venture capital per head as the UK. a vibrant entrepreneurial culture and

now boasts 1,500 companies employing “I see Cambridge as similar to Stanford investors with plenty of start-up capital.

45,000 people, up dramatically from 1980 University 25 years ago, in its openness to Hermann Hauser, a physicist who

when it consisted of just 20 companies embrace start-ups and the ability of helped to lay the foundations for the

employing a few hundred people. professors to get involved with companies,” microcomputer industry in Cambridge

University spin-outs from 2001 to 2006 says Bandel L. Carano, managing partner before going on to become a serial

raised over £390 million in financing and at Oak Investment Partners in Palo Alto entrepreneur and successful investor, says

employed over 1,700 people, according to and an active investor in Cambridge-based the size of the talent pool in Cambridge is

the 2008 Cambridge Cluster report. And start-ups. by far the most important factor driving

they managed to attract over half the What is it that singles out Cambridge innovation. Using crystallisation as an

aggregate investment of Stanford spin- from other European universities? analogy, Hauser says, “You need a ‘seed’ to

outs — an impressive achievement given Researchers, investors and entrepreneurs initiate crystallisation, but you also need a









F 32

INNOVATION





- entrepreneurs and spinouts









How to build more Cambridges

in Europe

There’s a growing body of knowledge internationally about how to build

dynamic innovation clusters like Cambridge. Some of the basics have been

summarised by the Science|Business Innovation Board, an independent

panel of European innovation leaders, a member of which is Jean-Philippe

Courtois, president of Microsoft International. Here are the Board’s

recommendations:

“Clusters of dynamic companies around top-rated universities are vital

to economic success. The EU counts some 2,000 clusters, 70 different

national cluster policies, and hundreds of regional programmes. But

compared to the US or China, Europe’s approach is small, timid and diffuse.

We believe EU cluster policy should incorporate these principles:

• Build on existing strengths. Clusters cannot be planted on bare soil.

They can only be nurtured in places that have already demonstrated

knowledge, skills and growth.

• Focus resources. Don’t scatter the money far and wide. Pick just a few

of the most promising regions and sectors for support, and provide an

environment – family-friendly, multidisciplinary, well-paid – that will

attract the brightest minds.

supersaturated solution. We have a • Be open. Encourage the best people, wherever in the world they may

supersaturated solution of bright people.” be, to work in Europe’s clusters. Promote open competition, among

As an innovation centre, Cambridge also universities, companies and regions, for funding. Promote border-

benefits from a strong base of technology crossing – among people, ideas, scientific disciplines, and industries.

consultancies, says Andrew Mackintosh, • Benchmark, monitor and be transparent. Base funding and regulatory

chief executive of the Royal Society policy on empirical analysis of what’s working and on open

Enterprise Fund, which backs early-stage competition.

technology start-ups. Innovation hubs in • We urge the EU to designate a few Special Innovation Zones in Europe

their own right, the Cambridge (SIZE) with a special legal status. It would give them extra cash to

consultancies are, in fact, technology invest and special, temporary dispensation from rules that hamper

development and design centres. They free movement of people and ideas. These centres of excellence

conduct their own R&D and manage their should be chosen through transparent, international, data-based

own intellectual property. So in addition to competition, rather than through closed-door, regional politics.

giving technical advice to companies large • Introduce innovation skills as early as possible in schools and

and small, Cambridge consultancies universities.“

generate spin-outs. The oldest >>







F 33

university’s colleges mean that as well as

coming together in subject departments,

“people from different disciplines get

thrown together and are expected to

make intelligent conversation”. As a

consequence, Cambridge’s academics

can find it easier to track down local

expertise in areas beyond their own

domains.

Cambridge also helped pioneer the

concept of on-campus “incubators” for

start-ups. Professor Alan Hughes, of the

Cambridge Judge Business School, points

to the role of the St John’s Innovation

Centre, which rents office space by the

month and in small units. Another key

factor, says Hughes, is the concentration

of key individuals with highly valuable

networks who can open the doors to

finance and advise on how to develop a

new business.

With the right introduction Cambridge

start-ups can easily raise several million

pounds in their own backyard. The hard

part is raising $100 million for a new

pharmaceutical product. That may be one

reason why Cambridge, despite its



“You need a ‘seed’ to initiate success creating start-ups, has yet to

match Silicon Valley in producing world-



crystallisation, but you also need leading tech companies. Its two global

champions to date are ARM, a global



a supersaturated solution. We leader in semiconductor design with $490

million in revenues, and Autonomy, a fast-



have a supersaturated solution of growing software maker with annual

revenue of $740 million.



bright people.” One way to improve the cluster’s

connections to the outside world would be

to attract more large businesses to set up

Hermann Hauser co-founder Amadeus Capital Partners Limited. their own R&D operations in the region.

For example, Microsoft established

Microsoft Research Cambridge in 1997,

growing from three researchers to more

>> consultancy, Cambridge Consultants, itself university research. While Hauser does not than 120. More such investments would

a university spin-out which celebrates its dismiss intellectual property, he says 99 bolster the Cambridge dynamic.

50th anniversary this year, has developed a per cent of the value created comes from Cambridge-based start-ups also rarely

string of technologies that have evolved people. grow large enough to have substantial

into new companies. Andrew Herbert, managing director of research centres before they are sold to

Policymakers sometimes fail to Microsoft Research Cambridge and a fellow larger businesses that have their

appreciate the relative importance of these of Wolfson College Cambridge, sees headquarters elsewhere. As a result,

talent-driven factors, says Hauser. So they innovation from both sides – and credits the Cambridge lacks the concentration of

focus on the wrong ingredients. For multidisciplinary culture at Cambridge for corporate headquarters that give Silicon

example, they may focus on the value of sparking new ideas. “I put it down to the Valley its high profile.

intellectual property rights that arise from college system,” says Herbert. The To turn that situation around,









F 34

INNOVATION









“The university’s

Can clusters really stick?

colleges mean that as

well as coming

Are innovation hotspots more resilient in recession? Like other

technology clusters, Cambridge has suffered in the wake of the recent

banking crisis as markets for initial public offerings dried up. But

together in subject Cambridge has been there before, in the recession of the early 1990s

and the technology crash of 2000. One recent study of Cambridge’s

departments, people businesses, The Cambridge High Tech Cluster: Resilience and response

to cyclical trends by Alex Drofiak and Elizabeth Garnsey, points out that



from different among firms set up in the depths of the 1990s recession, the “survival

rates for Cambridge high-tech firms were unusually high, and exceeded



disciplines get thrown rates for all East Anglia firms and UK firms”. If anything, businesses set

up in hard times seem to have fared better than those created when



together and are finance was readily available, perhaps, says the report, because only

firms with good prospects were founded in the recession of the early



expected to make 1990s. The survivors then benefited from the economic expansion later

in the decade. “I believe that times of difficulty encourage creativity. It



intelligent would not be a surprised if we look back in 5 to 10 years and recognise

that some great companies were started during the current challenging



conversation.” economic times,” says Charles Cotton, founder and chairman of

Cambridge Phenomenon Ltd.









Cambridge is developing technology research, Whittle Laboratory for fluid

transfer centres to attract multinationals. dynamics and thermodynamics,

The Broers Building, a commercial Computer Laboratory, Institute for

property development, was designed to Manufacturing and Department of

lure small and large companies to work in Veterinary Medicine. They sit alongside

close partnership with researchers to Microsoft Research and the

commercialise their technology. Its first Schlumberger Research Centre.

tenants include Nokia Research Centre Despite the many policymakers and

and Base4 Innovation, a spin-out company experts who visit Cambridge to glean the

from the Cavendish Laboratory, which secrets of its success, those who are part

develops “detection platforms” for of its innovation ecosystem say there is no

healthcare and the life sciences. set model for driving innovation. That’s

The Broers Building sits alongside the because today’s model for transforming

Hauser Forum, another centre driving research into economic gain is already on

science-business partnerships. Funded by the way to being transformed and

Andrew Herbert chairman of Microsoft

Research Europe, Middle East and Africa Hermann Hauser and his wife, Pamela improved. What counts is agility.

and a fellow of Wolfson College Cambridge. Raspe, and the East of England “We operate in different ways and we

Development Agency, the Hauser Forum are changing some of the ways in which

has been designed “to stimulate we operate all the time,” says Ian Leslie,

innovative collaboration between clusters professor of computer science at the

of academics, start-up businesses and Computer Laboratory and previously the

established industries”. university’s Pro Vice Chancellor for

Both buildings are on the new West Research. By the time someone has

Cambridge Research and Development analysed how Cambridge succeeds in

Park, which also houses the university’s knowledge transfer, there is a strong

Cavendish Laboratory for physics likelihood that it will have moved on.









F 35

Smart collaboration

cuts energy consumption





Companies around the world are racing to find ways to

help individuals use less energy in the home. A

partnership between Microsoft, energy supplier RWE

and hardware provider ELV is tackling the problem with

a device that plugs into an Internet connection and is set

up at the touch of a few buttons.

BY ANNA JENKINSON provider ELV to develop a device that plugs “It’s a plug-and-play solution,” says









E

into an Internet connection and creates a Microsoft’s Bruno Schmidt, industry

lectricity companies around the smart home at the touch of a few buttons. market development manager for the

world are racing to develop “What we are really doing is a first step utility industry. “All you need is an Internet

equipment to help homes and towards a smart grid,” says Holger connection. It’s simple and it’s mobile. You

apartments automatically slash Wellner, RWE’s project manager for can install it on your own and you can take

energy use. These “smart home” SmartHome. it with you when you move to a new home,”

technologies are being tested from San The RWE-Microsoft SmartHome Schmidt says. It can also be operated

Francisco to Seoul, but many of the do-it- system, available in Germany by the end of remotely from a mobile phone.

yourself kits are complicated to install and the year, gives individuals the ability to SmartHome, which was developed by

configure. More sophisticated systems are programme electric appliances – both for the companies at a cost of about €20

expensive and require professional convenience and to cut energy million, will cost consumers a few hundred

installation. As a result, global rollout of consumption. The environmentally friendly euros depending on the size of their

such energy-saving tools has been system can be set up so when the alarm apartment and how many smart

disappointingly slow. clock rings in the morning, the shutters thermometers are needed. The

To tackle the dilemma, even the world’s automatically rise, the heat turns on and approximate price is €10 per square

largest electricity companies are looking the coffee machine starts brewing. It can metre, or about €1,000 for a 100 square-

for collaborations with other industries. also be programmed to turn the heat off metre apartment. The solution can save a

Germany-based energy supplier RWE, for when sensors detect an open window, and household between 10 and 30 per cent of

example, has worked with software to switch on electrical goods only when its existing energy use. Depending on

provider Microsoft and German hardware rates are cheaper. consumption patterns, the investment can









F 36

ENVIRONMENT









be recouped in about three or four years. innovators and start-ups around the world

Consumers will be able to purchase and to compete for the money and become part

use the device with all energy providers. of a huge virtual team tackling the

Other smart-home products on the technology hurdles to deploying 21st

market, Schmidt argues, are either low- century power grids.

cost solutions from a home depot store All these companies are tapping into a

that are difficult to install and configure, or recognition by industry, policymakers and

high-end solutions that are extremely individuals that cutting energy use is one

expensive, often require separate wiring of the most effective solutions to global

and need to be installed and configured by warming. The European Commission is

professionals. “Both of these have failed to funding energy-saving initiatives and the Smart meters will help households save

energy.

make big strides in the market.” Schmidt development of smart grids through its

said. “For the first time in history, all the Strategic Energy Technologies (SET) Plan

technologies are in place that allow these and the related European Industrial

kinds of services to be implemented in a Initiatives. Its €2 billion smart grid adjustments relating to transmission

flexible, easy-to use way.” initiative aims to upgrade and re-equip issues or different plug sockets, the need

Europe’s electricity network by building to set up telephone helpdesks and sales

Bridge technology intelligence into the existing passive services in the relevant languages, and

RWE, Microsoft and ELV aren’t the only delivery system. compliance with different countries’

companies that are joining forces as a new Smart meters are a bridge technology. regulatory and legal requirements. The

era of IT-driven energy management From the beginning of 2011, The company aims to start selling in the

dawns. Itron and Cisco are also working in SmartHome system will be linked to a Netherlands and the UK by mid-2012.

the respective fields of smart metering and smart meter, enabling energy-saving Other countries will follow if the product

networking communications and measures. In the future such home-based proves popular.

announced a partnership in September. monitoring systems will be linked directly Saving energy is a top priority for

They plan to develop technology to ensure to the smart grid, which could for example governments everywhere. Now the

consistent and interoperable wired and enable washing machines to function when question for policymakers is how to

wireless communications among the a lot of wind power is being generated. “It’s encourage consumers to spend a few

various parts of the smart grid. all a question of scale,” said Wellner. hundred euros to go green.

In July energy giant GE and four venture RWE also has plans to sell the product

capital companies launched a $200 million outside of Germany. “Modifications are

global campaign to speed the development needed to sell the product elsewhere,”

of smart grids, inviting researchers, RWE’s Wellner said, citing technical i More information

www.microsoft.com/environment









F 37

The smart way

to roll out smart grids



G

overnments around the world BY KLAUS HOLSE ANDERSEN Corporate Vice the energy price, to turn on a home

are racing to invest in smart President Microsoft Western Europe appliance such as a washing machine. This

electricity grids to reduce energy would allow the user to avoid periods of

consumption and battle climate high energy demand and take pressure off

change. The European Union’s Strategic

Energy Technology (SET) Plan includes a Smart grids are the power grid.

A smarter grid can also help change

€2 billion investment in smart grids over

the next ten years. By 2020, the EU aims to an opportunity for consumer behaviour and attitudes toward

energy. When millions of individuals own

have smart meters in 80 per cent of

homes.

Europe, but some plug-in hybrid electric vehicles (PHEVs), a

smart energy system could allow them to

These technology upgrades are vital.

Worldwide, many of the transmission and

challenges still buy electricity from the grid during late

night, non-peak hours. Then, if the grid

distribution systems linking power

generation sources and consumers are

remain. needs power during peaking events, the

utility might draw from the stored power in

inefficient, ageing and increasingly those very same PHEVs. Indeed, utilities

strained. And global demand is rising are already deploying many devices with

rapidly. New sources of green energy such the microprocessors and two-way

as wind and solar can not be tapped communication facilities that will enable a

efficiently without a two-way exchange of wide variety of capabilities not possible

information on energy supply and demand. before, including the collection of more

But what is a smart grid? Although information, local decision-making and

there is no universal definition yet, the coordination.

European Technology Platform The European Commission is funding

SmartGrids, a body created by the smart grid research and demonstration

European Commission, defines them as projects. The Task Force on Smart Grids

“electricity networks that can intelligently set up in November 2009 is advising the

integrate the behaviour and actions of all European Commission on a wide range of

users connected to it”. Energy companies, issues, from functional requirements and

for example, could send information to RWE’s three-point, 400-volt plug, which standards to data safety

allow electric cars to be recharged

consumers about variations in the price of anywhere in a matter of minutes. Smarter

Though EU policy on smart grids is not

energy throughout the day. The smart grid, grids will inform homeowners when yet decided, security and privacy concerns

using a smart meter, could tell a electricity costs are lowest. need to be addressed. In order for the

householder the best time, depending on system to work properly, utilities need to









F 38

ENVIRONMENT









“Secure energy supply and good

interconnections will be crucial to

power future growth. One of the

next great European projects is to

give Europe a new European super

grid for electricity and gas. This

will help to meet our growing

needs for energy in smarter ways,

so that we have secure and stable

supplies of energy which meet our

climate change goals.”

José Manuel Barroso

European Commission President









install smart meters that can collect, in as data and people) can be authenticated in

close to real time as possible, masses of appropriate circumstances.

data on when the consumer is using its

electricity. That can create a privacy risk. Managing claims relating to identity

Also, despite massive spending on smart attributes, with a system that allows

grid security, smart meters may still be people to pass identity claims (sometimes

vulnerable to cyber-attacks as the a full name perhaps, but at other times

connection to households is made through just an attribute such as proof of age or

the Internet. Data on household behaviour citizenship). This system must also

is encrypted in commercial or home address the issues of authentication,

networks for example but then decrypted authorisation, access and audit.

at the smart meter; as a result, for a short

while the data is available for hackers to Alignment of technological, social,

access easily. political and economic forces to ensure

The smart grid is a major opportunity real progress towards a safer, more

for society but the underlying technology trusted Internet. The goal is to put users in

provokes understandable concerns. control of their computing environments,

Microsoft is committed to addressing those increasing security and privacy, and

concerns and developing solutions. preserving other cherished values such as

Microsoft’s Smart Energy Reference anonymity and freedom of speech.

Architecture (SERA), is the first SERA is the second utility offering to be

comprehensive reference architecture that released from Microsoft following the

addresses technology integration announcement of Microsoft Hohm, a free

throughout the full scope of the smart online application developed to enhance

energy ecosystem. the experience of utilities, customers and

We advocate three elements to building provide further insight into the supply and

greater trust in smart grids and the demand of residential energy use.

Internet systems on which they will The challenges are important and real

depend: but the benefits are as well. Microsoft is

working closely with European

Creation of a trusted stack where security policymakers, utilities, service providers

is rooted in hardware and where each and customers to provide a safe smart grid

element in the stack (hardware, software, experience for all. i More information

www.microsoft.com/environment









F 39

Fishing Cactus is

W

hen accidents leave patients Fishing Cactus is a computer games

with impaired motor skills, studio created in 2008, when its three



a start-up that doctors need to help them

re-connect with everyday

founders found themselves out of work.

The well-known games studio they were



began in the thinking processes and actions.

Conventional rehabilitation methods can be

working for went out of business, so they

decided to set up their own company. And



world of difficult to organise and manage, as well as

being expensive. But what’s called “serious

that turned out to be a smart move: the

company rapidly became profitable and is

entertainment game” technology can help – enabling

doctors to support their patients with

now one of Belgium’s fastest-growing

games studios, creating its own traditional

games. Now it’s simulated real-world experiences, in a safe, entertainment games, developing games



moving into what

easily controlled and cost-effective for other publishers (including porting

environment. An example is being developed successful established games on to new



are called by Fishing Cactus. platforms, particularly mobile)





“serious games”

– starting with

one that can help

doctors support

patients left with

impaired motor

skills after an

accident.









Gaming’s serious side

Helping brain-damaged

patients

F 40

HEALTH







and consultancy services. a meal. They simply do not know where to

Serious games represent the next step in start. Traditional re-learning therapy is Getting serious about games

this fast-growing start-up’s evolution. provided in a physical set-up, such as a

Fishing Cactus’s first foray into the serious “test” apartment. But this can be expensive, One of the fastest-growing and arguably

games market is a solution designed to help hard for the doctor to monitor and takes up most exciting areas in the gaming

doctors to rehabilitate patients who have time – so it is available to only a limited industry, serious games are those

suffered brain damage following number of people. designed for purposes other than pure

an accident. Fishing Cactus’s solution replicates entertainment. For instance, serious

routine everyday processes in an Xbox- games may be used in education and

Turning everyday tasks into a game based computer game, using highly realistic training to provide the user with a

So how does the game work? Patients images. The patient then uses this simulated experience of a real-world

recovering from brain damage often have environment to try tasks, with limited risk situation. As well as being used for

problems dealing with routine tasks that the and with the doctor able to monitor the practical purposes, serious games may

rest of us take for granted, such as cooking situation, whether in the same room or appeal more to the older generation, thus

remotely. If the patient becomes distracted helping games developers open up this

or loses concentration, the doctor can largely untapped market.

observe the exact point at which that

happened.

Here’s an example: asking patients to team of doctors and specialists in the

cook a very simple meal. First, they have to region.

assemble the right ingredients and from the The game uses some of the most

right location in the kitchen, such as the innovative tools available today, as

refrigerator or a store-cupboard. Next, they Grumiaux describes: “Microsoft is a big

have to remember the process, for instance player in the gaming industry and has

boiling water, turning on the oven and introduced some great new technologies,

cooking the meal for the right length of time. which helps gives us ideas for new

The doctor will also be able to tailor the gameplays that were not possible before.”

experience for the patient, including the One of the games platforms that could

addition of “troublemakers”, which are be explored is Kinect for Xbox 360 (see page

distractions designed to test concentration. 27), which removes the need to use a

Examples might include a pet cat entering regular games controller. “This is good for

the room, the iron starting to steam, a phone older people and patients, who may not be

call or a neighbour knocking on familiar with or able to use a keyboard. Just

the door. pointing at the screen is a lot easier for

them.”

Innovation Entering any new market is a challenge,

This innovation results from a close but Grumiaux points out that Microsoft’s

collaboration with the Microsoft Innovation support has helped this young company

Centre in Mons, coincidentally just a few meet its ambitions. “Microsoft gives us

hundred metres from the Fishing Cactus access to not just technology but business

offices. support too, finding us partners and a joint

“We were already in touch with the presentation at Belgium’s first serious

[Microsoft Innovation] Centre, discussing games conference. It’s also a big help being

about how they could help us develop new part of Microsoft BizSpark, which provides

Serious games include room settings

ideas and give us business support,” says access to free software, support and market

like these to help brain-damaged Laurent Grumiaux, commercial director for visibility.”

patients relearn daily routines at home Fishing Cactus. “When we identified the The hospital patients’ game will be ready

such as cooking.

potential for serious games, Microsoft not at the end of 2010, but Fishing Cactus

only provided technical and business already has other projects in the pipeline,

support, it also put funding into the project including more of these serious games.

and will help us find a second sponsor to

match that.” Their first serious game is i More information

www.fishingcactus.com and

under development in partnership with a www.mic-belgique.be









F 41

DIGITAL POLICY









Information

technology skills

boost innovation

Commentary by Andrew Herbert,

chairman of Microsoft Research Europe,

Middle East and Africa



“We are lacking



A

re our schools and universities well versed in IT so that he or she can

teaching the right skills to swiftly adopt new technologies to drive intelligent IT

enable a new generation of IT innovation broadly across all sectors of customers and

practitioners to drive forward the economy. By contrast the technology

innovation? The question has to be asked, pioneers have a critical role to play in technology pioneers.”

since everyone accepts that IT has a companies supplying IT products and

critical part to play in an innovation- services. They need strong skills to be

based economy. It’s not just about able to advance the state of the art and

companies selling IT products and create new technology and systems science to be offered alongside the more

services, but about how industries wield innovations. basic IT skills offered today. In the UK,

information technology to innovate in Microsoft Research in partnership with

engineering, aerospace, transport, Cutting-edge courses others, including the British Computer

medical and healthcare, energy, retail. In both cases a deeper introduction to Society, have launched a “Computing at

Information technologies can be used to computer science is required – with an School” initiative to bring this about.

improve business processes, reduce application focus for the “intelligent At the level of university education it is

costs, increase automation and deliver customer” and a technology focus for the a plea for universities to offer computer

new services. “pioneer”. Computer science provides the science courses that support both the

Frankly, particularly at school level, necessary theoretical and practical “intelligent customer” and the

the answer is no. Information technology understanding of technology, software, “technology pioneer” tracks, and to

is introduced and taught only as a general systems and human factors required to recognize that courses must remain at the

skill. A typical school IT syllabus will create a wide base of IT-savvy workers cutting edge of the discipline, in itself a

cover using the World Wide Web, who will double as an army of innovators. challenge given the pace at which

browsing and searching, email and The “intelligent customer” concept is technology develops. Moreover since the

perhaps social networking and personal poorly understood. People in such roles “intelligent customer” is likely to have a

productivity tools such as spreadsheets need much more than basic user skills or career in another industry, their teaching

and word processing. While these basic IT project management skills. They have must necessarily have a multi-disciplinary

skills are almost a universal requirement to be able to track and even predict dimension.

alongside literacy and numeracy, they fall technology developments and be able to Finally, in terms of research funding,

far short of the needs of an innovation design, build and deploy systems that this is a plea to recognise that research

economy. What we are lacking are two adopt and exploit such developments in can be driven by both the quest for new

types of practitioners: the “intelligent IT different fields of application. technology and also through identifying

customer” and the “technology pioneer”. At the level of school education this is new applications. Indeed, often a virtuous

The intelligent customer needs to be a plea for an introduction to computer circle of feedback links the two.









F 42

WHY CLOUD COMPUTING?

W









Why now? Going forward, all organizations, and especially entrepreneurial

Innovation in the computing industry continues to enable new SMEs, will be interested to tap into computing resources

opportunities for society, from a “PC in every home” to “cloud beyond what they could previously afford in order to increase

computing.” This recent, nebulous image refers to the use of productivity and reach wider markets.

computing power that you do not own and that is located

elsewhere, in “the cloud” of remote networks. New responsibilities

Before the promise of cloud computing can be realised we

What’s new? This concept is familiar to anyone who uses all need more confidence in the security, privacy, portability

online services to manage and store data, like Hotmail for and availability of our data. We need a safe, open and

email or Flickr for photos. On the other hand, businesses and interoperable cloud – one that is protected from the efforts of

governments have preferred to keep and control data in their thieves and hackers while also serving as an open platform for

own IT systems. sharing and storing information for people around the world.

We need connectivity that we can depend on.

As these organizations look to drive down costs, there is

increasing interest in alternative approaches. Cloud-based Legitimate questions reflect the responsibilities that come with

services are now more powerful and reliable for such users. cloud-based services: are you confident that your privacy is

Large data centres offer economies of scale, providing cheaper being protected, that your data is secure, that you can reach

computing power, with the flexibility to pay only for what you it when you need? If you live in one country but your data

use. Like electricity, you don’t need to own the generators; you is stored in another, whose laws govern, and are the rules

just plug in and pay as you go. consistent?



New opportunities for Europe Industry and governments can build on solid experience

By lowering costs, and also lowering barriers to entry for IT to address such questions. The current computing trend

developers, cloud computing offers “the medicine needed for holds the potential for tremendous cost savings, flexibility,

Europe’s credit-squeezed economy”, as Commissioner Reding and growth. Yet as we move to embrace evolving cloud

has stated. Simply put, both users and developers can do technologies, we also must meet fundamental expectations

more with less, by accessing greater computing power without about the management of your data. Microsoft is working

having to invest up front large sums for equipment. with customers, partners, and governments on the bold goal

to help Europe realise its cloud potential.

Innovation flows from these new capabilities. In a programme

called BizSpark, aimed at helping early stage start-ups by

providing them with software and support, many of the 8,000 For more information:

participating European companies are already providing www.microsoft.eu

cloud-based services. Cloud resources enable a new company

like Lokad in France to deliver sophisticated sales forecasting

tools for large retailers or manufacturers to optimise

inventories. Each year, Microsoft’s BizSpark European Summit

brings together many more promising start-ups who deliver

their solutions in the cloud.