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A Brand-Name Generic

A UK company has a smarter way to commercialize R and D

3 min read

High-tech blood analysis tools, fuel cells, radio tracking devices for racehorses, financial modeling software, cardboard soft-drink cans--these are just some of the varied and unique technologies brought to market by a British company that has just about the most unremarkable name ever, The Generics Group. Generics not only brings technology created by its own 200-strong research team to market, but it has a knack for helping other R and D operations exploit good ideas that don't fit into their regular business models.

A name that includes "Generics" may have an unfortunate low-rent resonance to North American ears, but the company has a classy pedigree. Founded in 1986 by Cambridge University engineering professor Gordon Edge, Generics began with Edge's vision of breaking with the typical consulting business model. Instead of merely selling its experts' time, the company invested in and exploited intellectual property generated by its researchers. And now the company also exploits the research ideas of others.

To support these efforts, Generics develops business plans, conducts market research, and seeks investors, with whom it shares risk. It has a new 8000-square-meter campus in the Cambridge area and laboratories or offices abroad in Baltimore; Boston; Frankfurt-am-Main, Germany; and Stockholm, Sweden. It's rich in intellectual property and getting richer; it applies for 100 to 200 patents annually. Its research activities range across telecommunications, engineering, materials, life sciences, and energy.

Expanding its commercialization and investment beyond its own research efforts came about when Simon Davey, Generics' CEO, recognized the need of large R and D operations for the collaboration and risk sharing required to bring technology that is not central to a company's core objectives to market. Looking for outside investors to commercialize its R and D is how Generics itself started out, "and we recognized that others must be in a similar situation," says Davey.

Generics distinguishes itself from other technology-rich organizations by offering help with funding, research, or commercialization in any combination. Firms with a more narrow involvement include Battelle Memorial Institute in Columbus, Ohio, which commercializes technologies for clients; mainstream management consultants like Accenture Ltd. in Hamilton, Bermuda; industrial design companies; and venture capitalists.

Early Generics successes focused on developing technology for Sweden's Esselte Group Holdings AB in Solna, adding inventory control and retail security features to clothing labels. This US $350 million business was sold in 1999 to Checkpoint Systems Inc., in Thorofane, N.J.

One Company you'd think would need little outside help is Siemens AG, in Munich, Germany, with its thousands of researchers. But Generics has been working with the new Technology Accelerator group within Siemens for the past few years, helping to nurture orphan product ideas that live in the spaces between the immediate interests of business units. R and D operations routinely generate more useful ideas than can be fitted into a business model. But Siemens, in an effort to keep these ideas from just ending up on the shelf, teamed up with Generics.

In one example, Siemens had been developing a microsensor for blood gases that can continually monitor patients, but was having a hard time turning it into a product. Generics added some nanotech polymer concepts, worked on reducing chip manufacturing costs, and focused on cutting-edge, higher-value markets. Thus it found ways to make the system "measure lots more, including cardiac and disease markers," explains Stuart Hendry, head of the Cambridge, England, company Sphere Medical Ltd., which Siemens and Generics created to market the device.

The detector can simultaneously measure multiple aspects of blood composition in real time, improving care in hospitals and clinics and eliminating lab work delays. In the world where usually only sexy, high-payoff projects attract outside venture capital, the product probably would have languished inside Siemens.

"It wasn't very compelling for venture funding," Hendry says, but with Sphere's 14 patents from Generics and 50 from Siemens, it plans to launch products in 2006 and 2007.

At Generics, the innovation doesn't stop with a single successful foray into one market or another. For example, after it developed a two-dimensional outdoor tracking system called RaceTrace, which reports the positions of horses in real time during a race--allowing, for instance, real-time updates on low-bandwidth devices such as cellphones--Generics moved to put other position-sensing technologies in the pipeline. These included a noncontact technology using electromagnetic induction for high-accuracy 3-D indoor tracking applications and a location technology using acoustic signals.

Another development nearing commercialization is improved, highly compact fuel cell technology, one-tenth the size of, and 20 percent the cost of, what's on the market today.

While it remains to be seen if Generics' model for commercializing R and D will supplant traditional venture capital or consulting, it's certainly a provocative alternative.

About The Author

Peter R. Savage is a technology writer based in North Yarmouth, Maine. His latest book, Back to Coal, was published in September.

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