Unlocking Hidden Innovation

About 20 years ago, engineers testing a furnace at a steel plant fed natural gas into it to stabilise the electric arc. The heat split the methane into hydrogen and solid carbon, including carbon nanotubes. Nobody then cared about clean hydrogen or nanotubes, and neither was the business of the company, which makes steelmaking equipment within the industrial group Techint. The result went on the back burner and stayed there.

Andrea Siciliani of Techenergy Ventures, the group's corporate venture fund, told the story to show that hidden innovation is real. When the fund made methane pyrolysis one of its theses, colleagues mentioned that they had done it at commercial scale two decades earlier. The team's first rule was to act like a VC. "You don't have to fall in love with your own idea just because it's your own idea," Andrea said. It mapped the competition and judged its own idea the most interesting. Three years of work followed, on the technology, a patent, a team and a narrative. The team chose not to develop the business internally, and last summer the spin-out raised €25m for a pilot plant.

Hidden by design

Leonardo Massa of MITO Technology, which invests in academic spin-outs, said the reasons such projects stay buried are built into the system. Tech-transfer offices are measured on patents and licences, and researchers who publish more win more grants and climb the rankings. A business-unit head who spins out a project misses the unit's target. Leonardo had never seen a university metric that rewards founding a spin-out. The innovation is hidden by design, Leonardo said, and the fault lies with the system more than with any person.

Corporate participants recognised the pattern. At one renewable-energy company, a low-noise installation method for wind turbines has taken ten years and has still not reached commercial scale, slowed by disagreement over whether to take it outside at all. A family office that works closely with an industrial company is developing a technology that could replace its own core products, and cannot settle who would own a spin-out or whose resources would build it. One investor said people inside companies often have neither the incentive nor any sense that their side project has value. Andrea added that corporate hidden assets are not only patents. They include know-how nobody used and projects dropped because the timing was wrong, they did not fit the core or the money ran out.

You don't have to fall in love with your own idea just because it's your own idea.

Problems before technology

An investor whose backers are industrial corporates said applied research in the US starts from a problem that matters to an industry, while in Europe it mostly starts from the technology. The firm's chemical backers hold large repositories of unused patents, so it works back from problems. In one case a biological asset a company already had turned out to suit leaching in mining. Many founders, the investor added, cannot say what problem their PhD technology solves, or for whom.

Leonardo had seen the cost of that. A plastic-recycling technology sat on an Italian university's shelf, and the head of department said it did not work. A researcher from another university saw the problem it could solve, bought the IP, built the company in the US and raised more than 30 million.

A participant from a Swedish university objected to the picture of universities hoarding IP. Under Sweden's professor's privilege, IP stays with the researchers, so the shelves are empty. Researchers pay their own patent costs, often with grants, which gives them a strong incentive. The hidden gems may be the researchers themselves. In one recent project, 16 of Sweden's top AI researchers turned out to hold nine ERC grants and 14 companies between them.

Mandate and people

Nothing moves without a mandate, a corporate venture investor said. Without a budget, a team and a standing programme, hidden gems never grow, and success depends on luck. A participant who runs a spin-off incubator at a state research institute had watched corporate accelerators come and go. "I am a traumatised innovation professional," they said, recalling a colleague who proudly announced a new venture-building unit. What, they wondered, had happened to the previous one?

A deep-tech investor said the people matter more than the model. They cited a venture builder where a chief executive from the start-up world and a technical co-founder from academia together won workable IP terms from every research institution in the country. Tech-transfer staff are rarely venture builders, so the field needs a hybrid professional. Leonardo disagreed. You cannot teach someone to be an entrepreneur, Leonardo said, but you can lower the barriers and show that it can be done again and again. Others offered ways to do that, from venture clienting protected by strong NDAs to university IP terms of the kind Denmark enforces, co-founder matching events and Iceland's 30% return on R&D spending.

Andrea admitted that the hydrogen spin-out needed a lot of planets to align, a forgotten experiment, a fund with the right thesis and people willing to act on it. The hosts' question was how to make that happen without waiting for the planets.

This Ripple was hosted by Andrea Siciliani (Techenergy Ventures) and Leonardo Massa (MITO Technology) at The Drop 2026 on 16 September.