The Dream of Full-Blown Industry-Academia Collaboration
Back in 1981, KAIST (Korea Advanced Institute of Science and Technology) became the first to purchase an electron microscope in Korea. At that time, companies had no official channels to use the electron microscope, so they had to ask a favor of their acquaintances or buy college students lunch to get their hands on the electron microscope. The hard-earned photos taken by the electron microscope became a great technological help to companies and served as driving forces of smooth business activities with foreign buyers. One of the volunteers who helped the poorly-equipped companies was Professor Hong, Kug Sun, CEO of Seoul Techno Holdings, established by Seoul National University.
Professor Hong, who obtained a doctorate from Alfred University in the US, started his career as a KIST researcher. Working as a KIST researcher, he happened to witness Japan’s tyrannical business practices: 300 dollar VTR recorders, manufactured in Korea by Sony, were completely put under the control of Sony because Sony refused to provide Korea with magnetic heads that cost only one or two dollars. He felt that did not make sense at all. In protest against Sony’s overbearing attitude, Professor Hong developed magnetic heads through an industry-academy project. Through such an experience, he deeply understood the importance of industry-academia collaboration. After he became a professor at Seoul National University in 1993, he and his Ph.D. students set up a venture firm and frequently pulled all nighters to work on R&D projects, the successful results of which are later transferred to companies via royalty agreements.
Professor Hong recalled, “In the beginning, we went through a series of trial and error. We had a hard time searching for a suitable factory site and once we managed to buy a piece of land to build a factory, we had to wrestle with complicated administrative processes to obtain a construction permit. Besides, some companies that misunderstood us as vicious entrepreneurs slapped lawsuits against us. There were many naysayers cynical about me. Criticizing me for aggressively doing business rather than doing research as a professor, they even dismissed me as an “unprincipled professor.” I had to prove them wrong. 284 papers of mine are on the list of the Science Citation Index (SCI) and I hold 67 patents in and out of Korea. Subsequently, I was honored with “Ungbi Medal” (Korea’s science and technology award) and was appointed as the CEO of Seoul Techno Holdings in March, 2011.
Seoul Techno Holdings is the Epitome of Industry-Academia Cooperation.
Professor Hong explained, “Industry-academia collaboration refers to a mutually reinforcing development model in which universities supply their advanced technologies and excellent talents to companies while companies give a fraction of their revenues to universities in return. By doing so, universities can focus on developing technologies based on information about markets and on-field problems while companies can go about the commercialization of technologies that would otherwise sit idly on the shelves in university labs.
“In addition, the biggest advantage that universities can enjoy through industry-academia cooperation is that students can have the opportunity of learning about entrepreneurship and can be nurtured into talent that the industry and society truly need. The ultimate goal of Seoul Techno Holdings is to build a virtuous cycle in the research filed: the transfer of technologies developed by universities leads to rewarding researchers with technology royalties and research facility upgrades and fundamental studies will be better funded, consequently raising the possibility of producing better R&D results.” continued Professor Hong.
Seoul National University, the second university in Korea that got the nod from the Ministry of Education, Science, and Technology of Korea to set up a company, founded Seoul Techno Holdings in November, 2008. The business areas of Seoul Techno Holdings are divided into three: first is intellectual property right management (discovering promising technologies and filing patent applications), second is technology transfer based on royalty contracts and third is support for the foundation of venture firms. To pull off such business activities, Seoul Techno Holdings went to great lengths to hire the best and the brightest. As of now, Seoul Techno Holdings has a total of 21 employees including two US patent lawyers, two patent attorneys, two experts in supporting business start-ups and one technology trader.
Furthermore, Seoul Techno Holdings, which files 900 patent applications after discovering and evaluating 1,200 technologies annually, is lending one-on-one support to 3,500 patented technologies held by Seoul National University and 19 colleges, 1,900 faculty members and thousands of R&D personnel with a master’s degree or above. Professor Hong forecast, “Though Seoul Techno Holdings is still at its infancy, it grossed KRW 8.7 billion in technology transfer alone from 2007 to 2009. And patent royalties are projected to sharply pick up over the next two to three years.”
Seoul Techno Holdings’s Social Contribution and Support for Business Start-ups
Seoul National University is running a R&D center and a venture business zone inside Green Bio complex in Pyeongchang (a county in Gangwon province), where KRW 300 billion was invested over the past five years. Accordingly, Seoul Techno Holdings is poised to tap into Seoul National University’s upgraded technologies in fostering companies, which are capable of independently doing R&D work, in order to steel Korea’s food industry against possible blows from Korea’s FTAs with the world’s major markets.
For a start, in June, Seoul Techno Holdings set up S&S Dairy in partnership with SPC Group (the mother company of franchises like Paris Baguette). In addition, Seoul Techno Holdings founded Maniker Hanttle in partnership with Easy Bio Group to venture into the poultry processing business. On top of that, in November, Seoul Techno Holdings paired up with meat processing company Autel to establish Seoul Ham. And in partnership with Damtuh, Seoul Techno Holdings opened SND Food that processes agriculture products including green tea leafs. Now, Seoul Techno Holdings plans to establish 10 more companies related to food fermentation such as soybean paste and liquor. Since these companies founded by Seoul Techno Holdings have access to technologies developed by Seoul National University and get investment money and marketing lines from their mother companies, they can easily jack up their sales within one or two years after their inception.
Seoul Techno Holdings’s another strategy is to carry out R&D projects as a subsidiary of companies like supercomputer developer Cocolink (who make attempts to enter the cloud computing sector) by exchanging Seoul National University’s patented technologies with their stocks. Also, in collaboration with Seoul National University Hospital, Seoul Techno Holdings can share knowhow on hospital marketing and management with BOBSNU (which has difficulty mounting marketing campaigns targeting hospitals) to become a subsidiary of BOBSNU. Likewise, business tie-ups with established companies will reduce risks from opening up new markets and raise the possibility of success.
Seoul Techno Holdings is greatly committed to supporting business start-up by professors’ labs and business startup clubs consisting of students. Professor Hong said, “Still, many professors and students hoping to start a business prefer starting a business on their own to being coopted into some established companies and they think it will be better revenue-wise. In particular, a majority in academia believe that partnerships between academia and industry will be characterized by more of meddling rather than help and support. Thus, to shatter the conventional wisdom, we are making the utmost effort to offer better administrative assistance and accounting and legal services.”
Ending the interview, Professor Hong revealed his ambition saying, “Seoul Techno Holdings also introduces government support programs and teaches prospective entrepreneurs how to apply for a variety of policy support projects designed for business start-ups. If we continue to put up subsidiaries from a long-term perspective, Seoul Techno Holdings is expected to run nearly 50 subsidiaries by 2017 and post KRW 1 trillion in revenue. In the process, business-minded students, professors and venture capital owners will make their dreams come true with the help of Seoul Techno Holdings.”