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Building Ties Between Large Corporations and Start-Ups, the MIT Way - By : Lotfi Chouanine,

Building Ties Between Large Corporations and Start-Ups, the MIT Way


Lotfi Chouanine
Lotfi Chouanine Author profile
Lotfi Chouanine is a research advisor at ÉTS. He holds a Ph.D. from the University of Ibaraki (Japan), an MBA from UQÀM (Canada) and a Master’s degree from the University of Volgograd (Russia).

Christopher Noble of the Massachusetts Institute of Technology (MIT) gave a lecture at the École de technologie supérieure (ÉTS) in Montreal on Thursday, June 8, 2017, in which he explained how MIT manages intellectual property portfolio and entrepreneurship. He is a technology licensing officer responsible for MIT’s energy technology and for supporting some of MIT’s key international partnerships. A Montreal native, he was pleased to accept the conference offer made by Lotfi Chouanine, a research advisor at the École de technologie supérieure (ÉTS) in Montreal.

From this conference, we propose a series of four articles to clarify:

  1. How MIT encourages students and faculty to start businesses;
  2. Its approach to patents and the management of intellectual property;
  3. Its intellectual property (IP) policy;
  4. How MIT manage to create business ties between large companies and start-up companies.

The first article in this series described how MIT encourages students and professors to start new businesses following the example of LiquiGlide, Inc., established in 2017. The second article in this series presents MIT’s intellectual property management process using the technology transfer cycle, while the third article explains how MIT was able to make its IP portfolio profitable. This article discusses MIT’s strategies to bring together large corporations and start-ups.

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Paradigm Shift at MIT

Until recently at MIT and elsewhere, ties between large corporations and start-ups were limited. In general, large firms were buying up start-ups that seemed promising and ignoring the others. In fact, research activities at MIT financed by large corporations were completely separate from the research activities of start-ups. But things have changed since then.

At MIT, universities are seen to play a crucial role in bringing these two worlds together. Several methods were therefore implemented to meet this objective:

  • Incubators financed by large corporations and located near MIT were created;
  • Large firms opted to drop licensing in order to get a stake in new companies as a return on research funding;
  • Networking opportunities between start-ups and large companies were organized.

An example of MIT’s new paradigm is the creation of Ambri.

A team of MIT researchers, originally funded by the US government (Department of Energy), developed a 10 MW mega battery that can store energy in substations. Total, a French company in the energy sector was very interested in this new technology. However, for a lack of required infrastructure, the company did not want to embark on the manufacturing process of the batteries. In the other side, the researchers who invented (reduction to practice) the battery wanted to start a business (start-up). Therefore, instead of acquiring a license for the invention, Total invested in the new start-up company, called Ambri.

This new approach of doing business with start-up companies was so successful that some large corporations like General Electric (GE) even moved their headquarters to Boston to get closer to the MIT innovation ecosystem.

Large Corporations and Innovation

In an article published on the Global News website on August 11, 2015, Hal Gregersen, director of the MIT Leadership Center, explained that it was difficult for large companies to innovate while focusing on results and increased revenues [1]. For him, “new ideas will never be nurtured for success by results-driven executives who either don’t know how to innovate themselves, or truly don’t honour others who do,” he said. “Because most of these ideas are long leaps of faith.”

Conclusion

It is the agility, the creativity and the talent demonstrated by MIT start-up companies in rapidly commercializing new ideas that attracts large corporations and leads them to work closely with these start-ups.

Lotfi Chouanine

Author's profile

Lotfi Chouanine is a research advisor at ÉTS. He holds a Ph.D. from the University of Ibaraki (Japan), an MBA from UQÀM (Canada) and a Master’s degree from the University of Volgograd (Russia).

Author profile


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