Two major pension funds from the Netherlands and Canada – ABP and OMERS – have seeded an innovation and technology program to invest in their domestic knowledge economies. Called inkef capital, it has already begun searching for the success stories of the future. SIMON MUMME reports.

In knowledge economies, the same “crystal ball questions” apply as in all other investment sectors, says Frank Landsberger, director of inkef capital in the Netherlands. “If we knew the successes of the future we would be better investors today.” But without perfect foresight, Landsberger and Phillip Haggerty, vice president – corporate development at OMERS with responsibility for inkef capital, must, like all investors, accept that a certain amount of uncertainty will exist in the knowledge economy investments that they carefully research and select for their 15-year program which has €200 million committed for the first five years. “You can’t know which way ventures are going to go, but if you wait until they’ve developed, you’ve lost the opportunity,”

Haggerty says. inkef capital– or, Investing in the Knowledge Economies of the Future – is a joint venture launched in June by US$208 billion ABP and the US$48 billion OMERS to invest in and provide mentoring to home-country knowledge economy ventures. It aims to simultaneously reap financial returns and strengthen these domestic industries. Haggerty says the innovation industries of Canada and the Netherlands are ranked among the top 10 in the world: they are relatively small economies “punching way above their weight in their intellectual property generation”. But while the inkef capital chiefs are not certain which new ideas will become raging commercial successes, they point to some sectors they keep a particularly close watch on. Due to increasing demand from ageing Western demographics, the health care sector is almost sure to produce knowledge economy champions in the future.

Medical and technological advances will always be applied to humans’ desire to be healthier for longer, Landsberger says. And there will also be demand for increasingly sophisticated computing products and information-transfer technologies, while the emerging field of nanotechnology can drive further innovation in medicine, electronics and the energy industries. The goods of knowledge economies are ideas, but since they must find commercial applications, inkef capital is searching for the “economic exploitation” of these commodities, Haggerty says. Landsberger chimes in to say their current search for knowledge economy success stories can be described as “mining for ideas” that can be commercialised. But a calculating commercial logic, as well as an open mind, must be exercised when unearthing these rich veins of investment opportunity. inkef capital must be very selective, Haggerty says, and consider whether the ideas they assess have international appeal – because globalisation has everything to do with successful knowledge industries. “We want to be able to take a small idea and grow it into a $10 million investment.

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