MIT, the ILP and R&D

Pablo Delgado deTorresMIT Senior Industrial Liaison Officer

COEPA

21 de Julio 2009

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Why Industry Comes to Academia

• Expose management to leading-edge thinking,technology

• Gain insight from internationally-recognized experts

• Strengthen strategic decision-making:– development of new products and processes– implementation of innovative management practices– achievement of effective growth strategies– New market and social ideas

• Create research synergies

• Recruit future company leaders

• Maintain Technological awareness

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MIT Research Funding -- FY 2008

$100.3 million (16%)

Source: MIT Data Warehouse -- FY08 Expenditures by Sponsor

Industry Sponsored R&D

• On-Campus R&D: $643 million

HHS30%

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MIT Total Industry Support -- FY 2008

Source: OCR FY08 Industry Support

Industry Sponsored R&D -- $100.3 million

Licensing -- $89.1 million

Gifts -- $42.3 million

Other -- 9.6 million

• Total Industry Support -- $241.3 million

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Solving Real-World Problems

• MIT Industry Alliances– Amgen, Merck, Ford Motor Company, Nippon Telephone and

Telegraph, Merrill Lynch, DuPont, Microsoft, Hewlett-Packard

• 708 companies provided R&D/gift support in FY 2008– 30 companies funded $1M+

– 158 companies funded $100K - $1M

Source: OCR FY08 Industry Support

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MIT - functional organization

• 71 MIT-related Nobel Prize winners– Including 7 current faculty members

• 5 schools, 34 departments/divisions/sections/other programs– 57 interdisciplinary research units

Research Center

Chemical Engineering

Biology

EconomicsMaterials Science

Computer Science

Management

Mathematics

Electrical Engineering

Source: MIT Facts 2008

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MIT Organization

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Research Sponsorship

• Many mechanisms and models exist

• Typically support ongoing investigations byindividual faculty or groups of faculty• excellent leverage of corporate R&D funds

• Examples of sponsorship options available at MITsingle company (higher cost but more exclusivity)multi-company (leverage costs and share results)

Small group of companies with common interests band togetherwith faculty to develop a focused collaboration on a narrow topic,outside a consortium model

Organized like single-sponsor projects, through participants’ orfaculty members’ own networks

consortia and collegia (multi-sponsored shared arrangements)

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Consortia

• Bring multiple companies together to sponsor researchin a field of inquiry

• Examples at MIT:– closed consortia

fixed number of members define and share all research andadministrative expenses and share all pre-publication resultsand licensing opportunities

example: Consortium for Advancement of Manufacturing inPharmaceuticals (8 companies)

– open consortiaopen membershipcurrent members pay annual fee and share all pre-publicationresults and licensing opportunities, with right to sponsoradditional projects

example: Media Laboratory (>100 companies)

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Confidentiality in University/Industry Relationships

• NDA’s– Single Faculty or University– Normal Protocols– Caution on Both Sides– Short term– Specific and event driven.

• Research Publication– Essential to Faculty/Mission of University– Review Period for Sponsor Prior to Publication

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Exchanging Personnel

• Usually arranged as part of sponsored research

• Company sponsors a senior scientist to participate in theresearch at the university as a “visiting fellow”

• Allows company scientist:– to participate directly in the research to enhance transfer of learning back to

the company– to participate in other university activities and develop a broad network at

the university

• Provides a prestigious benefit to top corporate researchers

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Consulting

• Most faculty seek private consultingrelationships with industry– at MIT: 20% of faculty time for consulting– helps faculty be aware of real-world challenges– helps keep research current, meeting needs– broadens faculty professional networks– helps develop placement opportunities for

students and graduates

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Consulting

• Benefits for companies:– brings in valuable outside expertise to solve current, short-

and long-term problems– helps broaden corporate vision for planning– allows company to protect confidentiality and ownership of

intellectual property– usually negotiated as personal services contracts with

individual faculty

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The Environment

• Venture capital firms, investment bankers, law firms andothers.

• Collaborative Science- Across disciplines Across institutions Across borders

• Most research intensive area in the country(6% of state product)

“Academic research is especially effective as an engine ofeconomic growth

in the Boston area precisely because it takes place not in an ivorytower, but in a complex network of relationships amonguniversities, hospitals, other affiliated institutions, corporations andEntrepreneurs”

Appleseed Report

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Culture

• MIT culture supports innovation• Organizational boundaries are very permeable• Intra/inter linkages easy to form and numerous• Environment forces random interactions• Cost of failure is low• Entrepreneurship is holographic at M.I.T.

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MIT ECOSYSTEM

Copyright 2002-2005 Deshpande Center for Technological Innovation, Massachusetts Institute of Technology

VALIDATED BUSIN

ESS MODEL

Supporting environment with complimentary assetsECOSYSTEMSupporting environment with complimentary assets

MITENTERPRISE

FORUMMIT TLO

ENTREPRENEURSHIPCENTER

MIT VMSSEBCVCPE

$100K BPCOMPETITION

Innovation Idea for a company

BusinessPlan

CustomersFunding Growth

INNOVATIONCLUB

TECHLINK

MIT SLOANSCHOOL

I-Teams

Legatum Center

X-PrizeLabD-Lab

Industrial Liaison Program

DESHPANDECENTER

Slide courtesy of Prof. Charles Cooney

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Many forms of “Technology Transfer” from Academia to Industry

• The graduating student

• Publication

• The consulting professor

• Collaborative/sponsored research with industry

• University seminars/courses for industry

• Intellectual Property licensing to– Existing companies– Spin-Outs

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• The ILP is industry’s chief gateway and guide to MIT.

• Provides expert counsel on building productive partnerships• Develops customized, cost effective programs

– assess, address strategic research needs– facilitate faculty, researcher interactions– monitor emerging technologies and innovative management practices

What is the Industrial Liaison Program?

ILPCompany ILP

COMPANY

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ILP Facts

• Founded in 1948

• Largest program of its kind in the world

• Worldwide industry membership– 33% N. America, 33% Asia, 30% Europe, 4% Other– broad range of industrial sectors, both traditional and high-tech

• 20 Industrial Liaison Officers*– average 15 years of industry experience– most with advanced degrees

*as of January 23, 2008

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Typical ILP Services and Deliverables

• On-campus sessions with faculty and research staff

• Faculty visits to company sites

• Executive research briefings

• Video/Web sessions with faculty and research staff

• Customized research reports

• Symposia and conferences

• Publications– ILP edition of Technology Insider– Web reports and digital presentation archive– Technology Review

• Facilitated access to MIT people, resources

• News and details of relevant MIT activities and programs

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Typical Benefits Companies Receive

• Monitor emerging/disruptive technologies• Discover new technologies to strengthen existing businesses• Validate or invalidate key investment decisions/ new product

development• Solve short term technical problems• Identify new industry partners• Use faculty for consulting/ advice• Participate in new industry standards setting• Train employees• Recruit new employees

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Deshpande Center for Technical Innovation

Launched with a initial $20 million gift

• Nurtures marketable inventions by:– Engaging established industry to spark inventions that solve existing needs– Funding proof-of-concept explorations with Ignition Grants

• Fuels market-driven innovation by:– Funding research with Innovation Program Grants– Getting the business community involved at an early– stage to help shape the direction of research– Educating the research community about– commercialization to focus efforts in the right areas

• Implements innovation in the marketplace by:– Catalyzing collaborations with partner companies and entrepreneurs– Directing researchers to appropriate business and entrepreneurial

resources– Serving as a liaison between MIT and the local business community– Showcasing MIT technologies via symposia and workshops

• Expanding to Singapore and Portugal

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MIT Deshpande Center

BRIDGING THE GAP: WHAT CAUSES IT?

AcademicResearch Marketplace

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The University isabout KnowledgeCreation andEducation

The Market isabout Productsand Services

Slide courtesy of Prof. Charles Cooney

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MIT Deshpande Center

Copyright 2002-2005 Deshpande Center for Technological Innovation, Massachusetts Institute of Technology

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Events

Catalyst Program

AcademicResearch Marketplace

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BRIDGING THE GAP: HOW WEADDRESS IT

GrantProgram

HOW?

Innovation-Teams

Slide courtesy of Prof. Charles Cooney

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TLO’s Mission

Bring about commercial investment todevelop inventions from MIT research

–To bring therapies and other products intopublic use–To show the public, Congress, and fundingagencies tangible results of basic research–To allow faculty and students to see real-world results of their research–For economic development—inMassachusetts and nationally

Content courtesy of Lita Nelsen director of the TLO

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Technology Licensing Office Statistics

• 500 new invention disclosures/year• 100 new technology licenses/year• 15-30 new companies/year• Over 650 active licenses• About 300 spinout companies total

Spinouts particularly important for “Break-through”technologies

– Investments are large– Time-to-market long– Risk of success very high– Large, existing companies reluctant (or unable) to invest at such an

early stageEffect on earningsDisruptive to their own R&D agendas

– But ready to buy products/company at substantial price when spin-outreduces risk and time-to-market

Content courtesy of Lita Nelsen director of the TLO

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MIT’s Patent and Licensing Goals

• See that ideas are practiced broadly• Maximize benefits to general society• Enhance the educational process• Create companies and jobs• Provide funds to patent future ideas• Provide modest income to MIT

Content courtesy of Lita Nelsen director of the TLO

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The Tech Transfer Bargain

• University research leads to patent—but technology isunproven and high risk

• University is willing to grant exclusive patent license toCompany who will commit to the risk of developing thetechnology

• If development succeeds, the patent protects the Companyfrom competitors

• University benefits from product being developed and fromroyalties (shared with inventor)

Content courtesy of Lita Nelsen director of the TLO

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Strategy: do a lot!

The Volume Strategy

• Aim to maximize the number of technologies beingdeveloped– Rather than try to pick a few “winners” and concentrate on them

• 100 license/year—20-30 startups

Why are we able to do so much?• LOTS of world-class technology—dependent on government

support of basic research• Good IP protection• Consistent Tech Transfer policies throughout the university

– It’s about Impact, not (primarily) Income

• An experienced Technology Licensing Office

Content courtesy of Lita Nelsen director of the TLO

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Advantages of the “Volume Strategy”

• Maximizes participation of faculty and students in thetechnology transfer process

• Maximizes number of technologies invested in bycompanies and VC’s

• Maximizes probability of hitting a home run

• Technology is probably too early to be able to pick thewinners!

Content courtesy of Lita Nelsen director of the TLO

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Helping Inventors

From the TLO Inventors guide

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Biotechnology Cluster, Cambridge Mass.

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Emerging Energy Cluster in Greater Boston

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100K Student Business Plan Contest

• Over 100 entries/year

• Volunteers from business community serve asmentors and judges

• Over 500 people (mostly from business community)attend the final awards ceremony

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Venture Mentoring Service

• Over 100 volunteers from the entrepreneurial, angelinvesting, venture capital and other businessesprovide mentoring to entrepreneurs (including alums)associated with MIT.

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MIT Enterprise Forum

• Founded and run by volunteers from the businesscommunity

• Run separate monthly clinics for– “concept companies”– Startup companies– Early growth-stage companies

• Annual instructional and networking conference• Several hundred audience attendees per month

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And Many Others

• Entrepreneurship Center: Matches MBA students withinternships with entrepreneurial Company CEO’s

• Student Venture Clubs at undergraduate, graduatelevels in b-School, School of Engineering, etc.

• …….

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Economic Engine

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First Time firms

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Age of Founders

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Alumni Companies by Industry

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Startup Funding

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Sales

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Where

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Out of State Sales

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MIT: References

Bank Boston Study (1997)http://web.mit.edu/newsoffice/founders/

Multi-University Study (2003)http://www.masscolleges.org/Economic/default.asp

Technology Licensing Officehttp://web.mit.edu/tlo/www/

Industrial Liaison Programhttp://ilp-www.mit.edu

$50 K Competition http://50k.mit.edu

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Copyright2002-2005DeshpandeCenter forTechnologicalInnovation,MassachusettsInstitute ofTechnology

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Remember–Whenyoureachthesummityouareonlyhalfwaythruyourjourney

Slide courtesy of Prof. Charles Cooney