16 May 2012
In a wide-ranging interview, seasoned industry battler Giorgio Anania contrasts Photonics 21's flexibility with Europe’s business sluggishness.
By Matthew Peach, contributing editor
Optics.org: What are the circumstances of Martin Goetzeler’s departure?
Giorgio Anania: His resignation was sudden and unexpected; he was expected to renew his presidency but due to changes in Osram he felt that if he were no longer in the industry then he should not lead Photonics 21.
[In mid-March 2012 the Financial Times Deutschland reported that Goetzeler, a board member of Osram AG had handed in his resignation a few months before the division’s planned initial public offering. “Goetzeler would be receiving 2 million euros (USD 2.6 million) when he left and may not move to a competitor, according to his contract”].
What is happening next at Photonics 21?
There is no loss of continuity as the President’s responsibilities have passed to the four VPs; myself [Anania’s day job is Chairman of Cube Optics] as well as Bernd Schulte [Executive Vice President & COO, Aixtron], Malgorzata Kujawinska, [Professor at Warsaw University of Technology] and a new addition, to be confirmed. Meanwhile, the Working Groups keep on meeting and feeding into the necessary European Commission processes. It’s running on autopilot. The Photonics 21 rules are that if the president resigns then the VPs become responsible.
[Photonics 21’s presidential nomination committee comprises Anania, Schulte and two Working Group chairs: Mike Whale (Components WG, Oclaro) and Roberta Ramponi (Education WG, Politecnico di Milano)].
We are now coming up with some possible successor names and we will be contacting them to see if they are appropriate for the platform. What’s going to happen is a partly democratic process, because in the election of a figurehead, we cannot put four big industry players into a race. We are asking the Photonics 21 Board of Stakeholders if they have any names to propose. The appointment will likely happen between now and October. Then we will call the board of stakeholders to vote for or against the candidate.
Pastures new: Martin Goetzeler simultaneously exited Osram and Photonics21.
If we can elect an external, senior figurehead that would be optimal. If we cannot do that we could fall back on the VPs, but having a mid-level CEO would not really add much to Photonics 21. This approach and structure has worked very well, so far. When Martin was in place; he didn’t spend much time here but he had somebody in his department who was practically full time. As we move into the Public Private Partnerships, then politically if we have a big name supporting Photonics 21 it will be easier for the European Commission and for tax-payers to see what we are doing and that we have the support of the industry.
Is the national split and share of responsibilities at Photonics 21 representative of the membership across Europe?
Some people – especially in France – say about the decision making of Photonics 21 that it’s quite influenced by Germany. However, the real decisions are made by the Working Groups and those are open to anyone who wants to give up their time unpaid to help them shape the priorities. That’s the core of what we do. Anyone can participate in the work groups and it doesn’t matter which European country you come from. We don’t say we are going to check your passport at the entrance. It’s open to absolutely everyone.
Yes, there has been some concern that the VDI (Association of German Engineers) is very powerful because the Photonics 21 secretariat is provided by the VDI and some people feel that VDI has rather a big role. But frankly we were all very happy at the beginning when nobody else would fund the Secretariat and the VDI decided to fund it out of their own pocket. They have done a phenomenally good job. They put top-notch people on it. Moreover, it is not true that most of the influential people are Germans; there is also a French contingency, many of whom are bureaucrats. So I don’t agree that the Photonics 21 is dominated by Germany – there is representation from all over Europe.
Is the UK’s input to Photonics 21 weak?
Yes but that is self-inflicted. When I was CEO of a UK company [Bookham, now Oclaro], I had some of my guys at Photonics 21 but some other UK companies just haven’t chosen to invest their time. A big economy like the UK could do a lot more positively for Photonics 21 because there’s quite a lot of photonics in the UK. Usually we see a kind of battle between the French and the Germans but there could be more input from the UK.
Are the bridges between Photonics 21 and US and Asia strong?
I think there are useful bridges. We regularly invite OIDA and Asian photonics associations to present at Photonics 21 [SPIE Europe is also represented on the organization's Board of Stakeholders]. So I think the links are good. Of course, an important consideration today is the phenomenal growth of photonics in China. This is not because they are cheaper, it is because they are not so bureaucratic. Europe is still far too bureaucratic. That is the story of Europe. It’s no surprise that Europe is going downhill fast. No one here is even beginning to touch things that matter in Europe in terms of being competitive.
Is Photonics 21 suffering from this inertia – or is there a mechanism to move more quickly?
We are relatively small and focused and we can move quickly, but we need to remember with whom we are working. Photonics 21 is actually a lot more agile than the European market and environment into which we sell and advise so this organization is not the barrier here. Europe is changing fast but not as fast as China, which is making these changes quickly.
Let me talk about the European funding approach: Up until now a lot of the EC and other funding bodies were only allowed to allocate funds into long-term science, which did not create jobs. The rules will be revised for investing in Horizon 2020, for developments such the industrializable prototype. The idea of the Public Private Partnership model is that we decide some of that together – we have joint teams who decide who gets the money. In that sense we will be a lot stronger about prioritizing issues for longer term R&D.
How about the much discussed pan-European venture capital fund directed at the photonics sector. Is it a pipe dream or is it going to happen?
It’s both. There was an independent effort by some people in Barcelona to set up a fund called Eurolight Ventures. They asked me if I wanted to be a member of their investment committee. Photonics 21 said yes but they had trouble getting off the ground because there is a common problem at the moment closing financing rounds for investment. I think they are still in the process of assembling that particular fund, which is a private fund – not a European-sponsored fund. It’s just a group of smart guys that decided that recognize that there is a market opportunity and as Photonics 21, I think we want to encourage that.
There are also a lot of traditional VCs are realizing that rules will be skewed in favor of Key Enabling Technologies; and that they should probably be doing more in this area. That’s why I’m saying it’s a little bit of both.
This particular fund called Eurolight has so far not been really successful. But a lot of work has been done, for example, from the European Investment Fund; the rules have been rewritten to give preference to Key Enabling Technologies initiatives.
So, for example, if the European Investment Fund wanted to invest in a venture capital entity it would have certain limitations like what percentage of the total funding round they can represent. Now that there are the KET priorities, they are allowed to invest a lot more.
Do you expect to see that regular VC funds will be investing more in photonics – but that there probably won’t be a dedicated fund for photonics?
Yes I think that’s probably fair. Right now VCs cannot change their jobs willy-nilly because a lot of their pay comes when they sell their companies. So if they are half way through a 10-year fund, they won’t leave then until the fund has closed. For example, if they leave in year six, say, then they will have made zippo!
So I think that as opportunities in photonics become bigger then you might have some guys deciding to strike out on their own and start investing in photonics technology. The most likely feeling is that funds that are doing cleantech might decide that they will do more in photonics cleantech. That’s how it is going to work.
By September-October 2012 I will have more to say when the patents have been filed. But basically my day job is that I am still chairman of Cube Optics. I am remaining as chairman with Cube, which is doing pretty well now, and I will be the CEO of the new company. There’s nothing much more to say except the new company will have a sexy technology and initially be based in France. I’m going to keep my private activities a little bit separate from Photonics 21.
By the way, the subsidies that France gives at the R&D level for starting new companies there are incredibly high. If we do R&D at one of the qualified French labs we get in the first year 80 % of investment paid back by the taxpayer, in the second year, 75%, and in the third year, 70%. If we hire a PhD then we get paid back double their salary. So actually you can make a profit simply by hiring PhDs. On the one hand, France is an incredibly hard place to set up in business but they are trying to make up for it by these outrageously attractive terms for doing R&D. But having said that, overall I have definitely found that it is enormously easier to do business in the UK.
Quite a number of big European companies have felt the need to reincorporate themselves as US companies to grow. Is this a problem that is persisting in Europe?
Probably yes. I can tell you that with the new start-up I am doing, it would have been 10 times easier to do it in California from the start. When you are a public company, you want to have comparables and most of the comparables are not in Europe. And if you look at who values technology risk, the US market values it more than the European market.
When Bookham was a public company we were dual-listed on FTSE and NASDAQ. I found that my typical meetings in Europe were about optical fiber technologies being a good prospect because it allows you to make better phone calls. But in the US, investors understood the technology, the risk and the potential far more than in Europe. The difference between speaking to the investors in London and to those in the US was like day and night, in terms of their understanding of the market. Ultimately people who value the market can understand it better.
Is that change coming to Europe?
Not much. Europe is still a very splintered market – you tend to find that most SMEs tend to focus on customers that speak their language by necessity and habit. Such technology that there is in Europe is often focused on its home country.
Consider Europe’s four big continental countries – excluding the UK – there are inflexible labor rules and that’s a barrier to progress. If you want to have a flexible technology-friendly market then you need to be able to move up, down and sideways, and be flexible in adding or reducing jobs. Europe doesn’t want that to happen and it’s a big, big obstacle to doing technology. Luckily for the UK it is different, it has been able to escape from that rigidity.
When I was CEO of Bookham, there were 15 optical components companies in Europe; 14 in continental Europe and one in the UK; and the 14 in continental Europe died when the downturn happened because they just couldn’t react fast enough. If you want a social safety net it needs to be the country that does it, not the companies. Companies need to be light-footed. I think that is a big weight on all of the European countries except in the UK, which has luckily escaped some of that labor rigidity.
Today, the issue isn’t just about fighting for photonics, the issue is about fighting for putting more of the budget into technology, instead of for example structural matters or food. So instead of fighting to compete unfairly against African farmers we need to be able to compete fairly with the likes of China. There has to be a priority as far as investing in technology but there also has to be a priority for changing the rules of labor in Europe so that people can run after technology opportunities. I don’t see any of the big four continental economies even beginning to touch the politically incorrect subject of labor flexibility. So we need to keep on preaching the religion about what it takes to do technology business in Europe, and it’s going to take some time.
Final question: if the opportunity arises for you to be the President of Photonics 21, would you like the job?
One part of me would like to do this but one part of me would be scared of the amount of time it would take me. But overall I’m not going to say not a flat no to it because I am passionate about wanting to change things.
About the Author
Matthew Peach is a contributing editor toOptics.org