This document discusses filling the innovation gap at Purdue University by strengthening its innovation ecosystem. It proposes creating an Innovation Acceleration Network using a "link and leverage" approach to monetize Purdue assets in new ways. The network would provide shared platforms and tools to scale market-facing innovation projects across campus. It also explores the Fraunhofer Society in Germany as a model, noting how its institutes work as profit centers driven by industry needs through contract research. The goal is to achieve greater scale and coherence for Purdue's engagement system in accelerating innovation.

1. ACCELERATING INNOVATION
STRENGTHENING PURDUE’S INNOVATION ECOSYSTEM
ED MORRISON
FEBRUARY 11, 2014
1

2. Overview
The Innovation Gap at Purdue
Strengthening Purdue’s Innovation Ecosystem
The Fraunhofer Connection
Insights from the Global Leader in Applied Research
Purdue’s Innovation Acceleration Network
Using “Link and Leverage” Networks to Monetize Purdue Assets in New Ways
Launching the Network
Defining “next steps” to implementation

3. The Gap in Purdue’s Innovation Ecosystem
Purdue’s Agricultural Research and Engagement System extends across technology
readiness levels, but the same is not true for other technology fields. That leaves a gap.
Purdue TAP and Discovery Park partially fill this gap, but not completely. This
presentation explores this gap and how to fill it.
9
8
7
6
5
4
3
2
1
Purdue TAP
Purdue Research System
Technology Readiness Levels
System Test, Launch
& Operations
System & Subsystem
Development
Technology
Demonstration
Technology
Development
Feasibility Research
Basic Technology
Research
Time to Market
Short term:
0-6 months
Mid term:
6-18 months
Long term:
18-48 months
Gap

4. The Gap in National Innovation Ecosystem
The Design Team for the National Network for Manufacturing Innovation identified
a similar gap at the national level.
Source: National Science and Technology Council, National Network for Manufacturing Innovation: A
Preliminary Design (2013), page 8.
“The focus of the NNMI lies
squarely in the applied research
region, after basic research has
been conducted and prior to full
commercialization of a
technology..TRLs 4-7.”
Committee on Science, Space and
Technology
U.S. House of Representatives
May 12, 2012

5. The Gap in National Innovation Ecosystem
Manufacturing companies involved in the National Network for Manufacturing
Innovation have expressed this gap in another way.
Source: Conrady, C. and Carrick, G.,
“American Manufacturing Innovation Network”
Structural problem requires
a structural solution
Universities,
NSF Centers,
Federal Labs
• High-risk research
• Long time horizon
• Not focused on
shop floor implementation
Industry,
NIST MEP
• Incremental improvement
• Off the shelf technology
• Short time horizon
Time to deployment
Technical Innovation
Best
Practices
Basic Research/
Education
Manufacturing
Technology Innovation
Missing Middle
• Manufacturing technology
innovation, maturation,
commercialization, insertion
• Medium time horizon
• High impact

6. The Gap in an International Context
The UK government, facing a similar gap between its universities and the
market, is implementing a series of Technology and Innovation Centers (TICs).
Called Catapult Centres, these centers are designed to transform the UK
innovation system.
Source: Hauser, H., The Current and Future Role of Technology Innovation Centres in the UK (2010).

7. Filling the Gap: Expanding Market-Facing Research
Filling the Gap involves expanding research that will:
• Focus on Technology Readiness Levels 5
through 9, converting knowledge and technology
into money;
• Fit between typical multi-year government
research contracts and short-term Purdue
technical assistance contracts;
• “Face the market” in that industry managers --
not academic researchers -- will define the
research agenda;
• Focus on accelerating innovation: the
application of knowledge to generate money
• Accelerating the transfer of knowledge into
revenue generation by business firms
Purdue’s Engagement System
Technology Readiness
Levels 5-9
Technology Money
Technology Readiness
Levels 1-5
Purdue’s Research System

8. Filling Purdue’s Innovation Gap will:
1. Create new pathways to expanded market-facing research where the
industry sets the agenda;
2. Create new innovation hot spots to accelerate innovation across Indiana;
3. Provide new, powerful learning experiences that are market-driven, multi-disciplinary,
and team-based.
Key Success Metrics: Examples
For Purdue Colleges For Discovery Park For Indiana
• Increased diversity of
research projects across
TRLs
• Powerful learning
experiences for students
and graduates
• Increased industry
research
• Increased cross disciplinary
innovation initiatives
addressing large scale
innovation challenges
• Accelerate innovation
among Indiana SMEs
revenues from new
products and services
• Increased retention and
value of Purdue graduates
Filling the Innovation Gap

9. Filling the Gap: Expanded Industry Research
Creating new pathways to expanded market-facing
research at Purdue involves:
• Organizing Purdue around strategic
thematic areas
• Developing new paradigms of industry
research collaboration and creating
networks and alliances of researchers
around each thematic area;
• Designing rapidly deployable, agile and
sustainable platforms for continuous
engagement of industry with Purdue;
and
• Generating new revenue from Purdue’s
extensive research assets.
Filling Purdue’s Innovation Gap
will:
1. Create new pathways to
expanded market-facing
research at Purdue;
2. Create new innovation hot
spots to accelerate
innovation across Indiana;
and
3. Provide new, powerful
learning experiences that
are market-driven, multi-disciplinary,
and team-based.

10. Filling the Gap: New Innovation Hot Spots
Creating new innovation hot spots to
accelerate innovation in key strategic areas
within Indiana means:
• Increasing access to proven
technology and innovation
management tools;
• Supporting Indiana companies with
an agile innovation infrastructure to
accelerate the development and
introduction of new products,
processes, and services;
• Providing customized connections to
the world’s advanced applied
research networks; and
• Expanding access for Indiana’s small
and medium size enterprises (SME’s)
to globally sophisticated innovation
infrastructures
Filling Purdue’s Innovation Gap
will:
1. Create new pathways to
expanded market-facing
research at Purdue;
2. Create new innovation hot
spots to accelerate
innovation across Indiana;
and
3. Provide new, powerful
learning experiences that
are market-driven, multi-disciplinary,
and team-based.

11. Filling the Gap: Powerful Learning Experiences
Providing powerful learning experiences
involves:
• Experiential learning by students
engaged in real-world projects
defined by industry;
• Working directly with industry
partners;
• Expanding beyond traditional
student/professor relationships to
work in teams; and
• Providing unique and global
educational experiences
Filling Purdue’s Innovation Gap
will:
1. Create new pathways to
expanded market-facing
research at Purdue;
2. Create new innovation hot
spots to accelerate
innovation across Indiana;
and
3. Provide new, powerful
learning experiences that
are market-driven, multi-disciplinary,
and team-based.

12. Filling the Gap: Horizontal and Vertical Connections
Filling the Innovation Gap will strengthen horizontal ties across
Purdue’s colleges and vertical ties to the market economy:
• Horizontal ties will come from multi-disciplinary research;
• Vertical ties will come from research agendas defined by
industry partners.
Filling
the Gap
x.y
<process
name>
<process
name>
Strengthen
vertical ties
with industry
Strengthen
horizontal
ties across
Purdue
9
8
7
6
5
4
3
2
1
Technology Readiness Levels
System Test, Launch
& Operations
System & Subsystem
Development
Technology
Demonstration
Technology
Development
Feasibility Research
Basic Technology
Research
Engineering
133.4
Agriculture
61.6
Science
61.6
Health
26.7
Veterinary
13.4
Pharmacy
11.6
Technology
9.4
Liberal
Arts
5.7
Education
3.7
Research Focus
Basic Applied
Market Economy
Purdue's Engagement System:
Engaged Research
Purdue's Extramural Research Awards, 2011-2012 (in $millions)
Other
18.6
Purdue's Research System: Academic Research

13. Universities Operate Within Ecosystems
Startup Ecosystem
Start-up firms
Investor networks
Provides capital
and expertise
Accelerates
new venture
investment
Colleges and
universities
Skilled talent
pool
Innovating
Growth
Companies
Provides ideas,
incubators
and smart people
Recruits
smart people
Recruits and
trains smart people
Provides network
and mentoring to
start-ups
Provides
R&D partners
Recruits and
supplies
smart people
Provides
investment
and generates
wealth
Provides technology
support and training
Source: Ed Morrison
Innovation Ecosystem

14. Two Purdue Ecosystems for Market Engagement
Purdue anchors two “ecosystems” to translate technology into money.
Purdue’s Startup Ecosystem
Intellectual
Property
Technology Talent
University Innovation Inputs
+
Small and Medium
Sized Companies
with Growth Potential
Business Model and
Lean Start-up Frameworks
Sustaining
Innovation
-
Product Extension
Efficiency
Innovation
Market Extension =
Bundled Innovation
+
Management Frameworks
and Tools
+
Purdue and
Corporate
Partner Teams
Existing
Existing
New
New
Technology
Markets
-
Market Penetration
Transformative
Innovation
-
Product Market
Diversification
Sustaining
Innovation
-
More Growth
=
Higher rates of innovation
among Indiana companies
Purdue’s Innovation Ecosystem
+
Business Formation and
Support Networks
More Growth
Spin-out Companies

15. Purdue’s Engagement
System
Ecosystem Strategic Focus Existing Anchors Primary Customers Outcome Metrics
Purdue
Entrepreneurship
Ecosystem
Producing start-ups from
Purdue technology
Purdue Foundry Purdue research
faculty
Number of Purdue
start-ups
Purdue
Innovation
Ecosystem
Accelerating innovation in
existing companies using
technology and innovation
management tools
Purdue TAP
Purdue Extension
High growth SMEs
and Consortia of
industrial firms facing
a common innovation
challenge
Revenues coming
from improved and
new products and
services
Two Purdue Ecosystems for Development
Purdue can attract more investment to the university by strengthening these two
ecosystems. Steps are being taken to strengthen the Startup Ecosystem. More can be
done to strengthen the Purdue Innovation Ecosystem.
Technology Money
Purdue’s Research
System
Purdue’s
Innovation
Ecosystem
Purdue’s
Startup
Ecosystem
Purdue
Foundry
Purdue
Research
Foundation
Discovery
Park Purdue
TAP
Purdue
Extension

16. Overview
The Innovation Gap at Purdue
Strengthening Purdue’s Innovation Ecosystem
The Fraunhofer Connection
Insights from the Global Leader in Applied Research
Purdue’s Innovation Acceleration Network
Using “Link and Leverage” Networks to Monetize Purdue Assets in New Ways
Launching the Network
Defining “next steps” to implementation

17. Purdue Innovation Ecosystem: Fraunhofer as Partner
17
To determine how to fill the Innovation Gap, a Purdue team from the College of
Technology and the Purdue Center for Regional Development explored Fraunhofer as
a model.
The Fraunhofer Society (Gesellschaft) formed in 1949 and named after a famous
inventor, scientist and entrepreneur: Joseph von Fraunhofer (Think Edison).
Now the largest applied
research organization in
Europe
Applied research, technology
licensing (e.g., mp-3 format),
and spin-out companies
Similar to (but about 10X the
size of) SRI International
(formerly Stanford Research
Institute)

18. Purdue Innovation Ecosystem: Fraunhofer as Partner
In the German research landscape, Fraunhofer occupies a pivotal position
between public and private sectors.
18
Applied
Research
Basic
Research
Predominantly public Predominantly
private
Characteristics of
Research
Funding
Federal/
German
Länder
Institutes
HGF
WGL
Universities
Industry
(internal and
external
expenditures)
AiF
MPG
HGF Hermann von Helmholtz-Gemeinschaft
WGL Wissenschaftsgemeinschaft Gottfried Wilhelm Leibniz
AiF Arbeitsgemeinschaft industrieller Forschungsvereinigungen
MPG Max-Planck-Gesellschaft
Source:: Fraunhofer
The Gap

19. 19
nEstablished in 1949, Fraunhofer
represents one of the world’s largest
applied and most successful applied
technology agencies with over 80
institutes and centers
nMore than 22,000 employees: 4,000+
PhD’s
nAn annual research volume of €1.9
billion, of which €1.6 billion is generated
through contract research.
n70% of this research revenue derives
from contracts with industry and from
publicly financed research projects.
n30% is contributed by the German
federal government and the Länder
governments in the form of matching
funds.
Schkopau
Bayreuth
München
Bremen
Hannover
Würzburg
Ilmenau
Holzkirchen
Oldenburg
Dortmund
Schmallenberg
St. Augustin
Darmstadt
Saarbrücken Karlsruhe
Freiburg
Efringen-
Kirchen
Freising
Pfinztal
Stuttgart
St. Ingbert
Kaiserslautern
Erlangen
Nürnberg
Teltow
Oberhausen
Duisburg
Aachen Euskirchen
Potsdam
Berlin
Rostock
Lübeck
Itzehoe
Braunschweig
Bremerhaven
Jena
Leipzig
Chemnitz
Cottbus
Dresden
Magdeburg
Halle
Fürth
Wachtberg
Ettlingen
Kandern
Freiberg
Paderborn
Kassel
Gießen
Erfurt
Augsburg
Oberpfaffenhofen
Straubing
Garching
Bronnbach
Prien
Hamburg
Leuna
Fraunhofer: Global leader in applied research

20. Fraunhofer: Groups, Alliances and Networks
Over 60 Fraunhofer institutes are
organized into 7 Groups…
Information and Communication
Technology
Life Sciences
Microelectronics
Light & Surfaces
Production
Materials and Components
Defense and Security
with multiple internal alliances…
Adaptronics
Advancer
Ambient Assisted Living
Building Innovation
Cleaning Technology Polymer Surfaces
Digital Cinema
E-Government
Energy
Additive Manufacturing Food Chain Management
Cloud Computing
Nanotechnology
Optic Surfaces
Photocatalysis
Simulation
Traffic and Transportation
Vision
Water Systems
Automobile Production
Lightweight Structures
Embedded Systems
…and global networks.

21. Fraunhofer: Market Facing, Market Driven
21
Matching Funding
Industry and Government
Contract Research
Institute business model:
• Institutes work as profit centers: incentive
to “run to cash”
• Institutes keep most of what they
generate
• Private sector funding matched with
public sector dollars
• Spinoffs by Fraunhofer researchers are
encouraged
Customer base:
• Industrial and service companies
• Public sector
R&D activities:
€2,000
€1,500
• Application-oriented research based on
industry’s agenda
• Application-oriented basic research with
longer time horizons
• Research for German Defense Ministry €0
€1,000
€500
Total Business Volume
2006 2007 2008 2009 2010 2011 2012

22. Design:
The model of innovation of the
Fraunhofer Society can be described as a
network model,…The network, together
with a strong reputation, makes it fairly
easy for small and big firms to establish
a contact with the Society.
Drivers:
The Fraunhofer model allows the
organization to set up new institutes
where it sees a new market demand.
Fraunhofer: Design and drivers
Åström, Eriksson, Niklasson and Arnold, International
Comparison of Five Institute Systems (2008)
“
“
“
”
”

23. Overview
The Innovation Gap at Purdue
Strengthening Purdue’s Innovation Ecosystem
The Fraunhofer Connection
Insights from the Global Leader in Applied Research
Purdue’s Innovation Acceleration Network
Using “Link and Leverage” Networks to Monetize Purdue Assets in New Ways
Launching the Network
Defining “next steps” to implementation

24. The Central Idea: Achieve Scale with Coherence
Current Engagement System
for Innovation
a loose collection of components
that lacks coherence
Purdue’s Innovation
Acceleration Network
Proposed Engagement System
for Innovation
achieve scale with shared
market-facing innovation disciplines

25. Outcome: Achieving Scale through a Shared Platform
An Innovation Acceleration Network will provide the common language, frameworks,
platforms and tools needed for Purdue innovation projects to scale across campus. With
common understandings, innovation becomes more “plug and play” across Purdue.
1 Deploying
Building on
shared
2 3 shared
4 frameworks
platforms
Developing
shared
metrics
Using
shared
processes
Use new, emerging
models of technology
and innovation
management
Define new innovation
processes based on
open and collaborative
innovation
Achieve scale through
common platforms that
connect different
networks
Rely on shared metrics
to evaluate “what’s
working” across
campus
Example:
Technology Readiness
Levels
Example:
Open innovation
Strategic doing
Example:
Purdue One Hub
Example:
Common knowledge
transfer metrics
developed in the UK

26. Innovation Acceleration Network
with Market-Facing
Innovation Disciplines
The Innovation Acceleration Network
As the Innovation Acceleration Network establishes itself across campus, it will bring
coherence, speed, and “link and leverage” opportunities to expand industrial investment in
Purdue’s market-facing research.
University
and College
Centers
Unviersity
Unviersity
Unviersity
University
College
C1ollege
1
College
C2ollege
C2ollege
2
Colleges and
Departments
College
College
College
College 1 Departments
Existing
Engagement
Networks
Purdue
Extension
Purdue
TAP

27. The Innovation Acceleration Network
To achieve scale in innovation engagement, Purdue will need to pioneer new approaches
to market-facing research and engage industrial firms in ways not currently taking place
on the Purdue campus.
The Innovation Acceleration Network includes:
1. A core innovation lab; and
2. Multiple innovation labs (iLabs) within colleges
across the campus and Indiana.
This network would:
1. Increase market-facing industry research in
Discovery Park and across Purdue colleges and
departments;
2. Link more effectively with global partners
conducting similar market-facing research;
3. Create new multi-disciplinary learning
opportunities for Purdue students locally and
globally;
Purdue Core
Innovation Lab
(Core Lab)
Innovation
lab
(iLab)
1
iLab
2
iLab
n

28. The Core Lab will provide:
1. Common pool of innovation assets.—
Assemble and support a shared pool of tools,
frameworks, platforms and training for
innovation and technology management.
2. Asset leverage across campus.-- Provide a
market facing innovation infrastructure to
departments and centers.
3. External linkages to additional innovation
assets.-- Identify and link to external
innovation assets that can be rapidly deployed
by Purdue’s industrial partners and research
teams.
4. Powerful learning experiences.— Provide
Purdue students opportunities to engage with
global research teams.
Functions of the Core Lab
iLab
1
iLab
3
iLab
2
Purdue Core
Innovation Lab
(Core Lab)
The Core Lab provides services
to all iLabs and manages the external
relationships with multi-disciplinary applied
research institutes, such as Fraunhofer
(Germany); ITRI (Taiwan); VTT (Finland);
A*STAR (Singapore)

29. Core Lab’s Common Pool of Innovation Assets
• Technology and Market Assessments.— Evaluating
technology readiness and market opportunities.
• Agile Strategy Discipline.— Developing and implementing
collaborative strategies;
• Network and Alliance Development.— Designing and
supporting technology and innovation networks and alliances;
• TechnologyRadar.— Identifying, evaluating emerging
technologies in existing markets;
• MarketExplorer.— Identifying market opportunities for existing
technologies;
• Shared IT and Open Innovation Platforms.— Designing IT
support for technology and innovation management;
• Operations.— Organizing innovation and research and
development (R&D) effectively and efficiently using lean
processes;
• Technology and Innovation Management Training.—
Conducting training to increase the capacity for innovation
among Purdue and its partners;
• Innovation Metrics.— Developing metrics to evaluate
innovation performance
iLab
3
iLab
2
Purdue Core
Innovation Lab
(Core Lab)
iLab
1

30. The iLabs Value Proposition to Industry
Purdue iLabs provide industry partners with:
1. Customized, agile innovation
infrastructure.-- Each iLab will design an
lean infrastructure to rapidly meet an
industry research agenda;
2. Access to powerful innovation tools on
demand.-- Each iLab will have a portfolio
of the latest innovation tools, frameworks
and training supported by the Core Lab;
3. Access to researchers, faculty and
students on demand.— Each iLab will be
staffed by Purdue researchers, faculty and
students with a background in the
technologies of interest to the industry
partner.
PPI core
innovation lab
Innovation
lab
1
Innovation
lab
2
Innovation
lab
3
Industry support for iLabs will come in a variety
of ways:
— Base funding commitments to each iLab
— Contract research
— Donations of equipment
— Unrestricted gifts from alumni

31. Scaling Purdue’s Innovation Acceleration Network
Revenues in $000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Year 1 Year 2 Year 3 Year 4 Year 5
Year 1 Year 2 Year 3 Year 4 Year 5
Number of iLabs
Small ($100-200K) 2 5 10 15 25
Medium ($300-500K) 0 1 2 5 10
Large ($700-900K) 0 0 1 2 5
Core Lab ($1.5M-$3M) 1 1 1 1 1
• Potential Scale.—
Deploying the network
across campus and Indiana
could increase industry
support for Purdue research
by $20 million to $25 million
in 5 to 7 years.
• Timing.— Revenue
generation will accelerate as
the network grows.
• Drivers.— Success will
depend on how many iLabs
can be “franchised” by the
Core lab.

32. Metrics: A Purdue Innovation Dashboard
Company A Company B
Northwestern University has developed an “innovation radar” to
measure the innovation performance of individual companies. A
similar innovation metric could be developed for individual
Purdue centers, departments and colleges. This metric would
enable measured, focused improvements in performance.
Fraunhofer has developed similar dashboards to evaluate
innovation productivity and efficiency across different Fraunhofer
institutes.
The Core Lab would develop and
deploy an Innovation Management
Dashboard to promote:
• Common Metrics.— Create a
campus-wide performance metric
for innovation
• Improved Focus.— Enable
focused improvement on critical
characteristics of effective and
efficient innovation
• Continuous Learning and
Improvement.— Promote a
collaborative culture of continuous
improvement
• Global benchmarking.— To the
extent that Purdue aligns ints
metrics with Fraunhofer, enable
global comparisons

33. Overview
The Innovation Gap at Purdue
Strengthening Purdue’s Innovation Ecosystem
The Fraunhofer Connection
Insights from the Global Leader in Applied Research
Purdue’s Innovation Acceleration Network
Using “Link and Leverage” Networks to Monetize Purdue Assets in New Ways
Launching the Network
Defining “next steps” to implementation

34. Launching the Network: Strawman Schedule
Launch of the Core Lab will take place in Year 1. Development of the Core Lab will
occur coincident with the development of the first iLab. Configuration and launch of
iLabs will be flexible, driven in part by industry expressions of interest.
Year 1 Year 2 Year 3
Core Lab
iLab 1
iLab 2
iLab 3
iLab 4
iLab 5
iLab 6
iLabs 7-13

35. Next Steps
The next steps to developing the Innovation
Acceleration Network include:
• Workshop at Purdue.— Assemble a
core team to review this presentation and
develop a set of detailed outcomes to
engage with Fraunhofer.
• Workshop at Fraunhofer.— Conduct a
1.0 to1.5 day workshop at Fraunhofer:
• Develop detailed specifications for Core
Lab and iLab.
• Draft agreement with Fraunhofer IAO on
design and management of the
Network.
• Preparation of detailed prospectus.—
Prepare a business plan and investor
prospectus for the Network.

36. For more information, please contact:
Joachim Warschat
Univ.-Prof. Dr.-Ing. habil.
Director and Head of Technology & Innovation Management
Telephone : + 49 (0) 711 / 970-2081
E-mail: joachim.warschat@iao.fraunhofer.de
Antonino Ardilio
Dr.-Ing. Dipl.-Ing. Des.
Head of Technology Management
Telephone : + 49 (0) 711 / 970-2246
E-mail: antonino.ardilio@iao.fraunhofer.de
Ed Morrison
Regional Economic Development Advisor
Purdue Center for Regional Development
Telephone : + 1 216 650 7267
E-mail: edmorrison@purdue.edu
© Fraunhofer IAO, IAT Universität Stuttgart
http://www.iao.fraunhofer.de