How do we get more OEMS?

OEMs are important because they create a lot of value to the economy and society. It all starts with an idea on how to make a product with a technology, but what is also needed is an environment that supports the creation and development of new OEMs.

There is no shortage of valuable ideas and technologies from universities, research institutions and R&D departments of companies. Such organizations can actively look at possible spin-offs, but this process must happen carefully. They need to select the ideas on the basis of their potential to be commercialized and to create opportunities for an OEM. Financial resources must be available to work out business plans and to evaluate these in terms of technology, application and commercial opportunities in a certain market. In the Netherlands the selection process of OEMs needs to be stricter so that the new companies are more viable.

The entrepreneur plays a key role in setting up and shaping a new company. This person should not necessarily be the inventor or the owner of the idea, but be willing to take entrepreneurial risk and has the passion to bring the idea to market. The entrepreneur must build a strong team and a network with individuals who have experience in bringing new ideas to the market. In The Netherlands the inventor or owner of the idea assumes the entrepreneurship role, but does not always have the experience and skills to lead the business of the company. Therefore, things often go wrong.

Setting the startup in the vicinity an appropriate ecosystem can support product development. The partners in the ecosystem must be open to innovating together, willing to share the risks and have the relevant competencies, R&D, and production facilities. For example, in the high-tech ecosystem, there is a particular willingness to collaborate to realize new innovations. The companies trust each other and they dare share not only knowledge  but also risks. The high technical complexity of systems, stimulates the formation of that ecosystem with relevant competencies around OEMs. Therefore, for example, the new OEM SoLayTec, a spin-off from TNO which produces Ultrafast Spatial Atomic Layer Deposition Equipment, can rapidly develop its products and bring them to the market by being close to and working together with a number of partners the high-tech ecosystem. Collaborating with highly qualified development and manufacturing partners makes it possible to create complex products that meet the high requirements of the market. These partners provide operational skills and expertise in standards and certification that spare the new OEM a lot of money and effort. This allows the entrepreneur  to focus more on sales and marketing, while the core team focuses on further innovation.

Furthermore, in our example, by collaborating with research institutes in the ecosystem, such as  Solliance, which does research and development in the field of thin-film photovoltaic solar energy, SoLayTec can design its roadmap based on state-of-the-art solutions. With TNO, Holst Center and technical universities, The Netherlands offers companies possibilities  to develop new technology that they cannot do with their own resources.

Finally, public and private funding is important at every stage of the company. Unfortunately, in The Netherlands the availability of venture capital lags behind with respect to other countries. Companies which do not obtain financial support can get killed in the Valley of Death, when a significant increase in investment is required for their commercial breakthrough. The Netherlands should encourage more venture capital and angel investments. The key to achieve this is to make the Netherlands an attractive place to invest.  On the other hand, a company increases its chance to find private investors with innovative products and a strong team. Companies which participate into  cooperation projects have a higher  chance to receive public funding. In The Netherlands, the subsidies are limited at the moment, for example TKI (Top consortia for Knowledge and Innovation), and SME Innovation Stimulation in Top Sectors, Innovation Performance Contracts, but there are also European funding programs such as FP7 and Horizon 2020. Finally, collaborating with  risk sharing partners can partly solve capital problems.

The foregoing arguments show that a balanced combination of essential elements  increase the chances of success for new OEMs.