Universities in Innovation Networks

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Universities inInnovation NetworksThe Role and Future Promise o University Researchin U.S. Science and Economic Policymaking

Krisztina Z Holly January 2012

www.amer icanprogress .o rg

The ourth report in a series on U.S. science and economic competitiveness rom theDoing What Works and Science Progress projects at the Center or American Progress


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About this series on U.S. scienceand economic competitiveness

e U.S. Congress in la e 2010 asked he Depar men o Commerce o comple e wo s udies ao he reau horiza ion o he America COMPE ES Ac . e rs , which was released on Janua2012, a he Cen er or American Progress, ocuses on U.S. compe i iveness and innova ion. ond, due o Congress in early 2013, o ers speci c recommenda ions or developing a 10-year nainnova ion and compe i iveness s ra egy.

We applaud he commissioning o hese repor s bu believe we canno a ord o wai ha lonac ion. a s why we convened in he spring o 2011 he group o exper s lis ed on he ollow We spen wo days in wide-ranging discussion abou he compe i ive s reng hs and weaknessna ions scien i c endeavors and our economy, be ore setling upon he opics ha cons i u e

o repor s we publish here. Each paper in he series looks a a di eren pillar suppor ing U.S. scand economic compe i iveness in a globally compe i ive economy:

Rewiring he Federal Governmen orCompe i iveness

Economic In elligence Universi ies in Innova ion Ne works

Manu ac urers in Innova ion Ne works Building a echnically Skilled Work orce Immigra ion or Innova ion

e end resul , we believe, is a se o recommenda ions ha he Obama adminis ra ion and Cocan adop o help he Uni ed S a es re ain i s economic and innova ion leadership and ensure Americans have he oppor uni y o prosper and ourish now and well in o he 21s cen ury.

Many o our recommenda ions are sure o spark deep resis ance in Washing on, no leas our po re orm a number o ederal agencies so ha our governmen works more e ec ively and ehe service o grea er U.S. economic compe iveness and innova ion. is and o her proposals areo mee resis ance on Capi ol Hill, where di eren congressional commitees hold sway over di

en ederal agencies and heir policy manda es. a s why we open each o our repor s wi h hoverarching recommenda ion: Congress and Presiden Obama should appoin a special commissiorecommend re orms ha are packaged oge her or a single up-or-down vo e in Congress. In h

horough-going re orm is assured.

is new commission may no adop some o he proposals pu or h in his series on science aeconomic compe i iveness. Bu we look orward o sharing our vision wi h policymakers as we American people. Presiden Obama ge s i righ when he says, o win he u ure, we will havinnova e, ou -educa e, and ou -build our compe i or na ions. We need o s ar now.


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Coordinating editors for the series on U.S. science and economic competitiveness

Ed Paisley , Vice Presiden , Edi orial, American ProgressGadi Dechter , Associa e Direc or, Governmen Re orm, Doing Wha WorksSean Pool , Assis an Edi or, Science Progress

American Progress taskforce on U.S. science and economic competitiveness

John Alic , science, echnology, and economic policy consul an and ormer s a member o he CongressionalO ce o echnology.

Joseph Bartlett , o counsel in Sullivan & Worces erscorpora e depar men and ormer undersecre ary o

commerce a he U.S. Depar men o Commerce.

Maryann Feldman , S.K. Heninger dis inguished chair inpublic policy a he Universi y o Nor h Carolina, Chapel Hill.

Kate Gordon , VP or Energy Policy a he Cen er or American Progress.

Michael Gurau , presiden , Clear Innova ion Par ners, a ven ure capi al inves men rm.

David Hart , direc or o he Cen er or Science andechnology Policy a George Mason Universi y School

o Public Policy.

Christopher Hill , pro essor o public policy and echnol-ogy a George Mason Universi y School o Public Policy and ormer vice provos or research a George Mason.

Neal Lane , senior ellow or science and echnology policy a Rice Universi y and ormer advisor o hepresiden on science and echnology policy.

Rachel Levinson , direc or o Na ional Research Ini ia ivesa Arizona S a e Universi y and ormer assis an direc or

or li e sciences a he Whi e House O ce o Science andechnology Policy.

Jonathan Moreno , Edi or-In-Chie o Science Pand Senior Fellow a he Cen er or American

Arti Rai , Elvin R. Laty Pro essor o Law a DuUniversi y and ormer Adminis ra or or Ex A airs, USP O.

Andrew Reamer , research pro essor a he Geo Washing on Universi y Ins i u e o Public Pnon-residen senior ellow a he Brookings I

RoseAnn B. Rosenthal , presiden and CEO, BenFranklin echnology Par ners o Sou heas erPennsylvania.

Jonathan Sallet , par ner in he law rm o OM& Myers LLP, Science Progress advisor, and odirec or o he O ce o Policy and S ra egico he U.S. Depar men o Commerce.

Daniel Sarewiz , direc or o he Consor ium oScience, Policy, and Ou comes a Arizona S aUniversi y.

James Turner , Senior Counsel or Innova ion &

echnology, and Direc or o Energy programs Associa ion o Public and Land-Gran Univerand ormer pro essional s a and chie counsHouse Commitee on Science and echnology.

William A. Wulf , pro essor o compu er scienceUniversi y o Virginia and ormer presiden oNa ional Academy o Engineering.


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Universities inInnovation NetworksThe Role and Future Promise o University Researchin U.S. Science and Economic Policymaking

Krisztina Z Holly January 2012


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Contents 1 Introduction and summary

4 Current state of U.S. investment in innovation

6 Stoking the engine of innovation 6 Shifting investments and the role of universities in research

7 Changing views about the nature and impact of research

8 The importance of transformative research

10 Supporting the next generation of research faculty

10 Policy recommendations

12 Supporting the translation of knowledge 12 The economic impact of university spin-out companies

13 Technology transfer officesunder-resourced but critical partners

14 The innovation gap

15 Existing federal programs of potential benefit


19 Seeding innovation ecosystems 19 The case for innovation ecosystems

21 IMPACT


24 Measuring for success 25 Technology transfer metrics

25 Looking beyond traditional technology transfer metrics

27 Measuring sustainability through talent and linkages

28 Creating the measurement infrastructure



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Contents 32 Preparing for shifts in competitiveness34 Policy issues to consider

36 Conclusion

37 About the author and a cknowledgements

39 References

42 Endnotes


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1 Ce ter or America Progress | U i ersities a d I o atio networks

e Uni ed S a es is known or i s innova iveness and en repreneurial spiri .Be ween hal and hree-quar ers, or even more, o all economic grow h in he lashal -cen ury can be ied o echnological innova ion, depending on which s udy you use.1 Ye in he las ew decades, measures increasingly demons ra e ha heUni ed S a es is alling perilously behind in innova ion.

When we hink o echnological innova ion, we hink o inven ors, en repreneurs,

and corpora ions joining novel ideas wi h nancial capi al and markeoppor uni ies. E or s o increase innova ion should help suppor circums ances

or he priva e sec or o bring new produc s and services o marke . e spark o echnological innova ion, however, ofen begins well be ore he oppor uni y is obvious or atrac ive o priva e sec or. As a resul , he par nership be ween

he U.S. governmen s unding o research in he na ions public and priva euniversi ies plays a larger role han mos observers recognize.

Universi ies play a vi al and ex ensive role in driving innova ion in he Uni edS a es. ey o er a vas research base (a o al o $50 billion na ionwide), heabili y o each and develop a resh new work orce (3 million gradua es each year),goodwill o success ul alumni, he abili y o convene dispara e exper ise, and adeep commi men o local communi ies. Universi ies have been impor an players

o da e, and we have an oppor uni y o ur her nur ure hese vibran ecologies osus ainably genera e grea er innova ion and economic grow h.

In he con ex o he declining s a e o innova ion in he Uni ed S a es, we have anoppor uni y o ap in o universi ies in a varie y o ways, among hem:

Stoking the engine of innovation suppor ing universi y research, heounda ion or he mos groundbreaking innova ions and innova ors ha can

crea e new indus ries

Introduction and summary


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Supporting the flow and application of knowledge bringing indus ry exper ise o academia and reducing scien i c risk o enable early discoveries oadvance o he s age where he priva e sec or is willing o inves and capi alize on

hem

Seeding innovation ecosystems crea ing he cul ure, human capi al, andconnec ions necessary o orm innova ion ne works where researchers,en repreneurs, inves ors, manu ac urers, and o her research in eres s cancollabora e and compe e

Measuring for success developing he righ ramework and in ras ruc ure ormeasuring innova ion o guide policymaking and inves men s

Preparing for shifts in competitiveness re hinking assump ions and ryingnew approaches so ha policy can drive new ron iers o innova ion

Increasing globaliza ion, connec ivi y, access, and accelera ion o echnology only make he need o inves in innova ion all he more urgen . And ul ima ely, wemus realize ha he landscape is shifing, and wha works yes erday may no beas e ec ive oday, nor be he bes approach in he u ure. e Uni ed S a es and i suniversi ies should no only accelera e i s inves men s in research and innova ion bu also con inually reevalua e and redesign he radi ional mechanisms or doingso o prepare or he changing ace o innova ion long erm.

In he pages ha ollow, we examine all ve o hese ways o s oke innova ionhrough and around universi ies, relying on public- and priva e-sec or suppor

and collabora ion. We include speci c policy recommenda ions a he end o eachchap er o his repor , bu here is a brie synopsis o our main recommenda ions:

Increase inves men s in early-s age research, arge ing par o hese inves men soward high-risk, large-scale, rans orma ional projec s, wi h an emphasis on he

developmen o alen

Bridge he gap be ween early-s age research and he marke place hrough

policies ha suppor echnology rans er, programs ha increase knowledgeow be ween academia and indus ry, and par nerships ha suppor ransla ional

research and proo -o -concep projec s


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Re ocus ederal economic developmen unding on regional and local ecosys emsha develop alen and crea e links be ween researchers and he priva e sec or

Develop new, more comprehensive me hodologies o measure he linkages be ween inves men s in innova ion and he broader impac s in human capi al, new

produc s, and jobs o drive beter policy decisions and incen ives or innova ion Develop radical policy experimen s and incen ives o enable universi ies o

be a he ore ron o rends in innova ion and compe i iveness as he u uremechanisms o innova ion change

is paper will demons ra e ha hese recommenda ions are de ni ively appropria e or our na ion o pursue in order o boos he global s reng h andcompe i iveness o our science and our economy.


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Current state of U.S.investment in innovation

Despi e Americas long-held repu a ion o innova iveness, i ranked only six h in arecen s udy o innova ion capaci y. More alarmingly, he Uni ed S a es ranked laso 40 coun ries in erms o improving his capaci y over he las decade.2 We have

allen behind, and our rapid slide is only accelera ing.

Afer a long his ory o he Uni ed S a es a he op, how could his be? In 2005, heNa ional Academies Ga hering S orm commitee concluded ha he primary

driver o he u ure economy will resul rom advances in science and engineering. Ye ederal governmen unding o R&D has declined by 60 percen as a percen ageo gross domes ic produc ( he larges measure o our economy) over he las40 years.3 Meanwhile, o her coun ries such as China and Sou h Korea haveapproxima ely doubled heir inves men s in he las wo decades.4 o pu his inperspec ive, he o al annual ederal inves men in research in ma hema ics, science,and engineering is equal o he increase in U.S. heal h care cos s every nine weeks.5

Our human capi al inves men lags as well. e Uni ed S a es ranks 27 hamong developed na ions as measured by he percen age o undergradua escomple ing science and engineering degrees.6 And according o a Na ionalScience Founda ion s udy on earned doc ora es, na ionally more han wo- hirdso engineering Ph.Ds are now gran ed o oreign na ionals.7 Al hough his repor

ocuses on nancial capi al inves men s in he innova ion ecosys em, inves ing inuniversi y research is igh ly in er wined wi h developing he alen ha drives ourcoun rys research and developmen .

Jobs con inue heir exodus overseas, guting Americas economic vibrancy andinnova ive capabili ies. Over he pas decade in he Uni ed S a es, 42,000 ac ories

closed and 6 million manu ac uring jobs were los .8

ese are no longer purely low-wage jobs, ei her; rms such as General Elec ric Co. now loca e he majori y o research and developmen jobs ou side he Uni ed S a es.9 Similarly, innova ivee or s are no longer limi ed o companies based in our coun ry; in 2009, hemajori y o U.S. pa en s were led by non-U.S. companies.10


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e imbalance o inves men in innova ion began decades ago, bu is becomingeviden in our economy now. ake China, or example. Compared wi h i s radesurplus o $196 billion in 2009, he Uni ed S a es had a rade de ci o $379 billion.11 According o a Georgia ech s udy, China has now supplan ed he Uni edS a ess leadership role in echnological s anding and is he leading expor er o high

echnology worldwide.12

Five housand o Wal-Mar s 6,000 suppliers are in China.13

I we do no reverse course, hese rends will only accelera e as he pas severaldecades o shrinking inves men s in innova ion mani es hemselves. We have anurgen crisis ha can be addressed only i we renew our innova ive capaci y andinves in he long erm.


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Stoking the engine of innovation

e majori y o all economic grow h in he las hal -cen ury in he Uni edS a es can be ied o echnological innova ion, and o her coun ries have beenaccelera ing heir commi men o research and developmen . Meanwhile, he U.S.inves men s in science and innova ion have been slipping rapidly. ere are ourkey reasons why his is happening:

Shifing inves men s and he role o universi ies in research Changing views abou he na ure and impac o research e impor ance o rans orma ive research Suppor ing he nex genera ion o research acul y

Le s consider each in urn.

Shifting investments and the role of universities in research

Wi h shrinking ederal inves men in research, con inual expansion o manu ac uringcapabili ies overseas, and domes ic educa ion in he so-called S EM disciplineso science, echnology, engineering, and ma hema ics rapidly alling behind o hercoun ries, here is less and less o en ice corpora ions o ocus heir research anddevelopmen e or s in he Uni ed S a es. e R&D inves men s o U.S. companiesincreased 2.6 imes more overseas han domes ically rom 1997 o 2007.14 esi ua ion is only likely o worsen, as a hird o he U.S. research work orce is reachingre iremen age in he nex ve years, and hal in he nex decade.

Meanwhile, in addi ion o shifing inves men s abroad, corpora ions are scaling

back overall research and developmen e or s, increasing he signi cance o governmen unding. One s udy ound ha he 100 winning innova ions hosehighligh ed annually by he&D Magazine he R&D 100are no longer beingdeveloped by priva e indus ry o he ex en hey were almos 40 years ago.15 emajori y o hese award-winning innova ions now arise rom early discoveriessuppor ed hrough ederal unding.


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Corpora ions shy away rom long-range R&D inves men s or many reasons,including he lack o shor - erm nancial re urns, he uncer ain y o ou comes and

he risk o knowledge spillover o heir compe i ion. As a resul , corpora ionsend o choose inves ing in less risky endeavors.16 In comparison, universi ies are

no roubled by spillover e ec s, and in ac welcome hem, because dissemina ion

o knowledge is par o he academic mission and incen ive sys em.

Universi ies are among he ew places (including ederal labora ories) ha conduche ype o game-changing and disrup ive research ha is he ounda ion o many

o he mos signi can U.S. echnological advancemen s oday. A Na ional ScienceBoard repor ound ha more han 70 percen o so-called prior ar re erenceson he ron page o U.S. pa en sprior ar meaning any hing preda ing he pa enapplica ion da e ha is similar o or he same as he described inven ionpoin ed opublica ions by researchers a universi ies and o her public ins i u ions ra her han

he priva e sec or.17 En ire indus ries can be raced back o undamen al discoveries

a universi ies. And Silicon Valley, he pos er child o economic developmen , couldno have sprung or h wi hou ederal inves men s in research.

Ye ederal unding o research is precariously low. Curren levels o undinghave dropped 60 percen as a percen age o GDP in he las 40 years, a a ime when he coun rys compe i iveness is a grea risk.18 Now more han ever, he

ederal governmen mus redouble i s inves men s in research, which serves as heounda ion o innova ion in his coun ry.

Changing views about the nature and impact of research

Game-changing inven ions and discoveries can ake a long ime o ma ure, wi hhe impac s apparen only decades afer heir ini ial discovery. oday, or example,he In erne is a household word and has crea ed a groundbreaking shif in he

way we live, work, and play. Bu 30 years passed be ween he rs In erne messagein 1969 and he In erne boom o he la e 1990s. Similarly, i required a decade

rom he rs paper describing recombinan DNA o when biosyn he ic humaninsulin was rs commercially available in 1982; since hen rDNA has become he

undamen al principle upon which odays bio echnology indus ry is based.

Un or una ely, he majori y o Americans, policymakers included, are oday un amiliar wi h he process o research. Mos people can unders and anendeavor where he ou come is planned, such as manu ac uring a cell phone or

Universities areamong the ew

places (including

ederal laborator

that conduct

the type o game-changing

and disruptive

research that is

the oundation

o many o the

most signi cant

U.S. technologica

advancements

today.


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producing a lm. I is much more di cul o grasp he process o exploring heunknown. Bu in much he same way ha Roald Amundsen se his sigh s on heSou h Pole wi hou knowing wha he would nd here, he process o discovery is no haphazard or random. e process is delibera e, bu he ac ual momen o inspira ion can be a surprise.

Discoveries are buil on o her discoveries, and regardless o whe her he ou comeo a par icular projec has a direc commercial applica ion, he knowledgegained becomes a piece o he puzzle. Ofen he unexpec ed ou comes, such asChris opher Columbus landing in he Wes Indies, can be he mos impor angame changers. Bu because he resul o each projec is unknown a he ou seand one canno predic hose ha will lead o commercial success, a por olioapproach is required.

e plan ini ia ed by he George W. Bush adminis ra ion and con inued by

he Obama adminis ra ion o double research unding a hree key researchagencies he Na ional Science Founda ion, he Depar men o Energys O ceo Science, and he Depar men o Commerces Na ional Ins i u e o S andardsand echnologyin he nex decade demons ra es a posi ive commi men o bols ering American research and developmen . Ye Congress and he Americanpublic mus con inue o see he impor ance o hese inves men s, especially indi cul economic imes. In par icular, addi ional increases in ex ramural ederalresearch unding is essen ial o enable many o our na ions new ideas and o os er

he nex genera ion o innova ors.

The importance of transformative research

In large par , his lag ime be ween discoveries and produc s can pu researchunding a risk. Facul y are spending increasingly more ime on applying or

gran s, ra her han doing research. e payline he percen age o proposals haare unded or he Na ional Ins i u es o Heal h is a i s lowes level ever. isphenomenon, along wi h he conserva ive na ure o peer review, can limi risk-

aking by acul y, who hesi a e o submi a proposal unless hey are airly cer ain

he resul s will suppor he hypo hesis.19

Research, however, should be risky and long- erm hese rans orma iveendeavors are generally he ones ha resul in he bigges break hroughs.

rans orma ive research is de ned by he American Associa ion or he


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Advancemen o Science as research wi h he po en ial o genera e deep changesin concep s, o produce new ools or ins rumen a ion ha will allow he en irecommuni y o ex end i s reach, o crea e a new sub eld, or o bring oge herdi eren elds o make discoveries ha would o herwise be impossible.20

When he research process is no well unders ood by policymakers, early s ageresearch gran s can become smaller, and expec a ions become based on shor er-erm commercializa ion ou comes. Mul iple agencies suppor small research

projec s applied o narrow applica ions, while undamen al scien i c ques ionsare lef unaddressed.

e opposi e rend is needed. e ederal governmen plays a crucial role insuppor ing high-risk, high-reward research ha is no longer suppor ed by indus ry,and we should no be a raid o make big be s on big ideaseven hough he resul smay no be apparen or a long ime. In he pas and presen , a mix ure o public

and priva e ins i u ions such as he Depar men o De enses De ense AdvancedResearch Projec s Agency alongside priva e-sec or Bell Labs, Xeroxs Palo Al oResearch Cen er, and he Howard Hughes Medical Ins i u e have crea ed high-impac innova ions because o heir ocus on high-risk,high-reward research.

ARPA, which even ually rans ormed in o DARPA, beginning in he 1960s wouldaward gran s o $10 million or more in odays dollars in o large collabora iveresearch programs o suppor inves iga ors wi h bold ideas and led o decades o economic grow h. Many o he early universi y innova ions rom ARPA con inuedin o he priva e sec or hrough indus ry labora ories such as PARC and BellLabs, and spurred en ire indus ries. Mos o he seminal algori hms or compu ergraphics, or example, were developed a he Universi y o U ah in he la e 1960s, wi h he leading minds going on o ound companies such as Adobe, Pixar, SiliconGraphics, A ari, Ne scape, and o hers.

Al hough ocused more on applied research now, DARPA con inues a ca aly iclevel o inves men oday closely linked o he mission o de ense agencies andneeds o he war gh er.

e Depar men o Energys new Advanced Research Projec s Agency-Energy isdoing similar work oday. Au horized a $300 million in FY 2008, ARPA-E replica ed

his model o ocusing alen and eamwork on high-risk, high-reward projec s. Early indica ors show success, and i s essen ial or Congress o unders and he high-valueimpac programs like his can have, especially in years wi h less overall unding.21

When the resear

process is not w

understood by

policymakers, ea

stage researchgrants can

become smaller,

and expectations

become based

on shorter-term

commercializati

outcomes.


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Supporting the next generation of research faculty

One o he addi ional values o ederal inves men in universi y research goes beyond he crea ion o new knowledge or impac hrough discovery o hecrea ion o a whole new genera ion o researchers and innova ors. U.S. universi ies

inves grea resources in o developing Ph.D.s, and ederal unding plays a crucialrole. Case in poin : 75 percen o li e sciences Ph.D. s uden s are suppor ed by ei her a research assis an ship/ raineeship or a ellowship/gran .22 Bu he Uni edS a es is no able o cap ure heir ull value, or a leas wo reasons.

Firs , a ull wo- hirds o Ph.D. s uden s are curren ly oreign na ionals, whoace di cul ies s aying in his coun ry afer heir disser a ion. Despi e he

challenges around immigra ion re orm, his is an obvious place where acili a ingimmigra ion would have immedia e bene .

Also, he pa h rom recen ly min ed Ph.D. o produc ive academic career hasnever been more di cul . A 2008 s udy by he American Associa ion or he Advancemen o Science de ermined ha young acul y were increasingly spending more o heir ime applying or gran s, encoun ering more di cul y han

heir more experienced colleagues, a he expense o spending ime working oadvance heir elds.23 And da a rom he Na ional Ins i u es o Heal h show ha

he average age o rs Research Projec Gran (called an R01 gran ) or Ph.D.s hasrisen rom 34.3 years in 1970 o 41.7 in 2004.24

By crea ing such large hurdles or early career acul y, we are limi ing hee ec iveness o he newes genera ion o innova ors we inves ed so heavily o os er.

Ex ramural research unding inves ed in o universi ies suppor s s uden s andheir raining, a cri ical piece or developing long- erm compe i iveness. Many

o he brigh minds o he nex genera ion are precisely he ypes o researchersin whom he governmen should be inves ing, given he rapidly changing na ureo some scien i c elds.

Policy recommendations

Despi e he igh nancial imes, he ederal governmen should increaseinves men s in basic research because i is hrough developing he alen and ideas ininnova ion and echnology ha we can crea e a sus ainable base or our economy.


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Carry ou he plan suppor ed by he Obama adminis ra ion and he researchand business communi ies o double research unding a he Na ional ScienceFounda ion, he Depar men o Energys O ce o Science, and he Depar meno Commerces Na ional Ins i u e o S andards and echnology, and expand hee or o con inue increasing inves men s rom he Na ional Ins i u es o Heal h

and o her agencies inves ing in basic research. Reserve par o he ederal research budge and arge i or high-risk, game-

changing scien i c projec s. e Na ional Academies repor , Rising Above heGa hering S orm, concludes ha 9 percen o research should go o very long-

erm unding.25 Develop me rics o measure success across he projec s wi h apor olio approach.

Inves in and empower program o cers o engage wi h he relevan pro essionalcommuni ies and make bold decisions o suppor rans orma ive research ha

migh be seen a rs by a peer review commitee as oo risky or unconven ional.Encourage universi y acul y o serve as ro a ing program o cers wi happropria e recogni ion rom he universi y adminis ra ion.

Fully und he model con inued by ARPA-E and adap i in o her scien i c areas odevelop new echnology pla orms. Large collabora ive research programs modeledafer ARPA, he precursor o DARPA and ARPA-E, are par icularly needed now.

Consolida e science ini ia ives across agencies and engage mul iple academicdisciplines, unding large innova ion hubs ha address undamen al scienceques ions ha can be applied across mul iple indus ries ins ead o ocusing onincremen al applied problems.

Ex end research and innova ion policy o reach beyond science and echnology,apping in o he unique capabili ies o economic regions o our coun ry o

maximize he bene s o he geographic clus er, in areas as diverse as media,educa ion, he crea ive ar s, aquacul ure, logis ics, and manu ac uring.

As described in he 2008 ARISE repor by he AAAS, provide par icular suppor

or early career researchers, such as seed gran s or unproven ideas, expanded long-erm early career awards, career-s age appropria e expec a ions when reviewing

gran s, and policies responsive o he needs o primary caregivers.26


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Supporting the translationof knowledge

Early-s age discoveries yield he grea es impac on he economy when hey ransi ion ou o he labora ory and in o he priva e commercial sec or. Ye evenhe mos promising break hroughs ace very real hurdles as hey s ruggle oransla e in o he marke where hey can make social and economic impac .27

Many promising discoveries al er be ore hey even have an oppor uni y o beconsidered by he priva e sec or, which generally lacks he long inves menhorizons and risk appe i e o inves in ideas a he poin mos ederal unding s ops

suppor ing hem. e cul ural gap be ween academia and indus ry ur her hinderhe commercializa ion process. As such, ederal policies can play an impor an

par nership role o bridge he gap be ween research and he marke place.

is sec ion o he repor looks a our key considera ions in crea ing incen ivesor commercializa ion:

e economic impac o universi y spin-ou companies echnology rans er o cesunder-resourced bu cri ical par ners e innova ion gap Exis ing ederal programs o po en ial bene

Le s urn rs o he economic impac o universi y s ar ups.

The economic impact of university spin-out companies

In 1980, he Bayh-Dole Ac enabled universi ies o own and manage hein ellec ual proper y arising rom ederally sponsored research. From an economic

developmen s andard, he Bayh-Dole Ac was a boon o local economies ando socie y a large as new echnologies were in roduced o marke . Shor ly afer

1980, produc s and spin-ou ss ar -ups based on universi y IPs eeply rose asuniversi ies and acul y had incen ive o commercialize heir inven ions.


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In 2009 alone, a leas 596 s ar -ups based on universi y licenses were crea edacross he coun ry, and 658 new produc s were in roduced o marke .28 In he

hree years be ween 2008 and 2010, companies based on USC research alone haveraised nearly $400 million in capi al.29

Universi y echnology rans er has a s rong local economic developmen impac .30

According o he Associa ion o Universi y echnology Managers, or AU M,annual survey, be ween 70 percen and 80 percen o all universi y s ar -ups areheadquar ered in he same s a e as he universi y rom which hey spun ou .Be ween 1980 and 1999, universi y s ar -ups in he Uni ed S a es crea ed $33.5 billion in economic value, a an average o $10 million per s ar -up. By 2007, 3,388universi y s ar -ups were s ill opera ional.31

Moreover, he ransi ion o he marke place does no jus occur hrough he crea iono new companies. Early universi y innova ions migh emerge hrough a spec rum

o knowledge- rans er rou es, such as acul y consul ing, s uden s gradua ing andaking jobs in indus ry, inven ions licensed o es ablished companies, and universi y

s ar -up e or s o urn ideas in o new high-grow h companies.

Universi ies by heir very na ure depend on an open and collabora ive exchange o ideas. e vas majori y o knowledge in universi ies is rans erred in o he priva esec or hrough open channels.32 Some o hese knowledge rans er rou es could be enhanced, par icularly hrough more delibera e atemp s by universi ies andindus ry o work oge her. Al hough many universi ies have ocused considerableamoun s o heir own resources on echnology rans er e or s, his crucial s age o

he innova ion process has been grea ly under unded o da e.

Technology transfer officesunder-resourced but critical partners

e Uni ed S a es enac ed he Bayh-Dole Ac o encourage universi ies ocommercialize heir research and o encourage his ype o impac , bu i didno provide resources o make his happen. Universi ies never heless have seup echnology rans er o ces o manage in ellec ual proper y and acili a e he

rans er o echnology.

ese o ces, however, on average end o lose money, in par because a success ulinven ion can ake 10 years or more o genera e royal ies.33 So, al hough universi y

echnology rans er o ces provide bene s o heir local communi ies, hey have

Although many

universities

have ocused

considerable

amounts o their

own resources

on technology

trans er eforts,

this crucial stage

o the innovatio

process has

been greatly

under unded

to date.


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limi ed abili y o reinves resources o enhance in erac ions wi h indus ry in as ra egic and proac ive manner.

echnically, universi ies may charge he cos o pa en ing o heir adminis ra ivecos pools or wha universi y budge o ces call acili ies and adminis ra ive

cos reimbursemen , or F&A. Bu he adminis ra ive componen s o F&A are capped by he ederal governmen a 26 percen , which means hese cos se ec ively don ge reimbursed.

e lack o resources or echnology rans er is even more acu e wi h hegrowing expec a ions or commercializa ion and economic developmen basedon universi y research. is cri ical knowledge rans er unc ion has become anun unded manda e in he majori y o universi ies, limi ing he abili y o aid in hesuccess ul ransla ion o research in o produc s, companies, and jobs.

The innovation gap

e universi y new ven ure process is deeply in uenced by early s age capi al.34 Some un amiliar wi h he commercializa ion process may look o priva e indus ry

o address his oppor uni y hrough inves men in early-s age innova ions, buas analys s Chris ine Gulbranson and David B. Audre sch poin ou , Universi y research does no passively spill over or commercializa ion and innova ion.35

Early-s age ven ure marke s are ine cien meaning hey do a poor job o iden i ying he bes oppor uni ies and inves ing in hem.36 So, even some o hemos promising innova ions s ruggle o have a chance in he ree marke . Fur her,mos universi y seed-s age innova ions oday are oo risky or even he mosin repid ven ure inves ors, which means hose rying o commercialize universi y innova ions ace a large easibili y and unding gap.

I is di cul o iden i y signi can innova ions ha were passed over by hepriva e sec or since, by de ni ion, he po en ial o hese inven ions has no beenrealized. Bu da a rom he Associa ion o Universi y echnology Managers

indica es ha oppor uni ies are overlooked; he number o pa en s led o every s ar up ormed is 20- o-1.37

Ven ure capi al used o be he risk capi al or he building o seed-s age high-grow h companies, bu he percen age dedica ed o seed nancing remains only


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abou 5 percen o he o al ven ure capi al inves ed, according o he 2011 Q2Pricewa erhouseCoopers Money ree repor .38 is is he resul o a marke ailure

ha needs o be addressed a he in ersec ion o research and he priva e sec or.

A recen growing ocus on commercializa ion a he ederal level is encouraging,

bu here is a risk ha e or s could lead o a shifing o priori ies away romundamen al research unding. Proo -o -concep unding should be expanded, bukep separa e, applied o only hose projec s ha have led o innova ions ha crossa hreshold o promise in he commercial sec or.

Existing federal programs of potential benefit

Un or una ely, very litle o he ens o billions o ederal dollars curren ly inves edin early-s age universi y research can be used o explore he commercializa ion

po en ial o he resul ing innova ions and help bridge developmen gaps. O herela ed programs curren ly sponsored by he ederal governmen , many do noachieve heir ull po en ial in addressing hese gaps. Linking hese programs, which span several agencies, hrough a Common Applica ion gran programproposed by our colleagues Jona han Salle and Sean Pool in heir repor in hisseries will s reamline ederal spending and address curren weaknesses.

e Small Business Innova ion Research and Small Business echnology rans erprogram adminis ered by he U.S. Small Business Adminis ra ion, which alloca es2.5 percen o ederal agency gran s or small businesses, has been a resource orsome small companies seeking o bring early-s age innova ions o marke . Ye many universi y innova ions are oo early o spin ou in o a company, so his program doesno ully address he need or earlier-s age proo -o -concep unding.

Likewise, he Na ional Science Founda ion has been experimen ing wi h indus ry par nerships hrough i s Par nerships or Innova ion program and EngineeringResearch Cen ers. And he Na ional Science Founda ion is in he process o expanding he Par nership or Innova ion program in response o he AmericaCOMPE ES Ac reau horiza ion a he end o las year.

Bu he scope o hese programs o da e remains narrowly ocused, leaving anoppor uni y o ap in o he broader research en erprises a each universi y.Case in poin : Federal atemp s o und proo -o -concep research such as heNSF Accelera ing Innova ion Research program can be a power ul orce in


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rans orming ederally unded research in o new produc s, companies, jobs, andsus ainable innova ion ecosys ems i hey ocus on building skills and communi y.Programs a universi ies ha bring oge her men ors, inves ors, and en repreneursa universi ies have paid dividends in erms o cul ure change and increasedcommercializa ion. Bu curren ly he NSF program is small, wi h gran s being

awarded cen rally. Coupling hese NSF e or s oge her could provide a robusoppor uni y o broaden he impac o hese e or s o s reng hen indus ry/research par nerships and develop local innova ion ecosys ems.

e Economic Developmen Adminis ra ion has pioneered par nerships wi ho her agencies hrough i s i6 program (an in eragency program ha provides $1million in unding over wo years o a local ecosys em o ca alyze echnology commercializa ion, new ven ure crea ion, and jobs) as well as i s Energy RegionalInnova ion Clus er ini ia ive, which s and o posi ively in uence he orma iono regional clus ers and clus er s ra egy developmen . ese kind o exible,

collabora ive par nerships need o become he new model or success.

More recen ly, he Na ional Ins i u es o Heal h in roduced various new programs, such as he so-called BRDG-SPAN program, a pilo program aimed

o und he ransi ion rom early discovery closer oward commercializa ion,and he soon- o-come Na ional Cen er or Advancing ransla ional Sciences, a

ransla ional science cen er. is ollows on he heels o he revamped Clinical andransla ional Sciences Award, NIHs mul imillion- dollar gran program o und

ins i u es ha ransi ion discoveries rom bench o bedside.

While many o hese programs arge di eren par s o innova ion ecosys ems anddi eren s ages o he innova ion li ecycle, here is no uni ying s ra egic ramework uni ing heir implemen a ion. As discussed in he rs repor in his serieson science and economic compe i iveness, Rewiring he Federal Governmen

or Compe i iveness, crea ing an overarching Common Applica ion ha s ream-lines he many similar and closely rela ed gran s and assis ance programs couldhelp reduce redundancy while increasing he abili y o hese programs o be mores ra egically and e ec ively implemen ed.


e ederal governmen can break down barriers be ween ederally unded, early-s age research and priva e-sec or inves men s in innova ion in order o crea e

Programs at

universities that

bring together

mentors, investo

and entrepreneur

at universities ha

paid dividends

in terms o

culture change

and increased

commercializatio


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new produc s, companies, and jobs. e ederal governmen can help supporknowledge and echnology rans er wi h he ollowing ac ions:

Main ain he curren legal ramework o he Bayh-Dole Ac o 1980 so hauniversi ies will con inue o inves in echnology rans er e or s.

Inves in more ransla ional research unding. is increase should no be a heexpense o undamen al research; we mus inves on all ron s and also betercoordina e unding across agencies and programs. Universi y-based ransla ionalprograms such as he Clinical and ransla ional Sciences Award are cri ical ormoving rom bench o bedside and should be con inued.

S ruc ure ransla ional programs or maximum impac . ese programsshould require ha indus ry exper s, inves ors, and en repreneurs be involvedin he solici a ion, developmen , and selec ion o proposals o enhance he

radi ional peer review process. ransla ional projec s should have a clearprojec plan ha leads oward commercializa ion, wi h ac ive managemen omiles ones alongside men oring and guidance by relevan exper s along he way. e Coul er Founda ion has developed one very e ec ive model ha can be emula ed.39

Coordina e heal h- and bio echnology-rela ed ransla ional and SmallBusiness Innova ion Research and Small Business echnology rans erprograms wi hin he Na ional Ins i u es o Heal h hrough a single programsuch as NCA S, managed by a group ha unders ands commercializa ion and

ransla ional research, and coordina e o her commercializa ion and proo -o -concep programs hrough a Common Applica ion Innova ion and EconomicDevelopmen Gran Program, as described in Rewiring he FederalGovernmen or Compe i iveness.

Implemen a mechanism or ransla ional Supplemen al Awards when warran ed, de ermined only afer research yields resul s. e Na ional ScienceFounda ions I-Corps Program, which provides proo o concep unding andmen oring o selec acul y a universi ies across he coun ry, is promising and

should be scaled and expanded o suppor projec s across all agencies, andprovide larger awards (up o $150,000) when warran ed. Fur her, consider aprogram or pos doc oral ellows o learn abou commercializa ion and con inueproo -o -concep work on heir disser a ions i hey show commercial promise.


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Design ransla ional unding programs such ha echnology rans er o cesare deeply engaged ra her han marginalized. Provide unding o suppor heseo ces wi h dedica ed resources o suppor he ransla ional program o se

hem up or success.

S ruc ure proo -o -concep programs in a sus ainable way. Al hough someuniversi ies have managed o secure donor and priva e-sec or unding o coversome o he cos s, even he mos success ul programs s ruggle o becomesus ainable on hese sources alone. Ins ead o s ruc uring proo -o -concep

unding as shor - erm pilo s, leverage o her unding sources, such as indus ry and donor suppor in parallel, o ex end he impac o he ederal unding.Given he impor ance o ransi ioning be ween early-s age and spin-ou o

he economy, unding proo -o -concep projec s is an appropria e role or heederal governmen o play.

Reward universi ies commited o advancing innova ion and buildingheir echnology rans er o ces so ha hey work well. o ensure ha

a ransla ional program will be success ul, use he e ec iveness o heechnology rans er o ce and he universi ys commi men o innova ion

as cri eria. is will have he added bene o mo iva e universi ies ocon inually improve heir echnology rans er opera ions.

Review and s ruc ure con ic -o -in eres policies a he Na ional Ins i u eso Heal h and o her agencies o main ain academic in egri y wi hou putingundue res ric ions on commercializa ion ac ivi y or addi ional adminis ra ive burden ha could o herwise be inves ed in echnology rans er ac ivi ies. Puin o place mechanisms or disclosing and managing con ic s o in eres , wi hguidance or acul y be ore hey come up agains hese issues.


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Seeding innovation ecosystems

While an acu e need exis s or proo -o -concep unding or ideas ha emergerom research, he innova ion gap goes beyond he nancing gap. Linkages

be ween he universi y and he priva e sec or are cri ical o bring relevance oresearch. And as an idea develops and moves in o he priva e sec or, i ideally will s ay local and hrive. ere is a need o s reng hen he rela ionships be weenuniversi ies, indus ry, governmen , and nongovernmen al organiza ions o nur uresus ainable local and regional innova ion ecosys ems ha can suppor he grow h

and success o new ven ures.

Elemen s o such an en repreneurial ecosys em include:

alen , including experienced en repreneurs willing o share heir knowledgeand jump in as early-s age chie execu ives

Early-s age capi al Access o early adop ers, cus omers, and suppliers Crea ion and collabora ion space near in ellec ual hubs

Universi ies are he cri ical piece o he puzzle beyond he developmeno knowledge and he commercializa ion o research. ey develop ourna ions work orce, crea e connec ions be ween people, and cul iva e inspireden repreneurs ha eed back in o he sys em. As a resul , universi ies can play acen ral convening role or local and regional innova ion ecosys ems ha can serveas a pla orm or growing a sus ainable and robus economy.

The case for innovation ecosystems

S udies show ha universi ies bene rom programs ha enable universi y innova ors, en repreneurs, and inves ors o connec wi h one ano her.40 Increasingly, universi ies are seeking ou ways o nance hese ypes o programsin he absence o ederal suppor .


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E or s have been highly variable and dependen on unding. Some universi iesare or una e o receive assis ance hrough major gifs or local unding, and boasinnova ion cen ers wi h gran programs ha have demons ra ed grea leverageand grea success. Chris ine Gulbranson and David B. Audre sch wro e abou

wo programs cen ered in engineering schools, he MI Deshpande Cen er or

echnological Innova ion and he Universi y o Cali ornia, San Diegos von LiebigCen er.41 Afer gran ing less han $10 million o projec s, hese wo cen ers helpedadvance 26 s ar -ups ha have raised a o al o $160 million in ou side inves men s.

In parallel over he las ve years, he Coul er Founda ion has unded programsspeci cally in biomedical engineering depar men s across he coun ry, includinga S an ord Universi y, Georgia ech, Drexel Universi y, and he Universi y o Virginia, crea ing bes prac ices along he way.

A di eren example is he USC S evens Ins i u e or Innova ion a he Universi y

o Sou hern Cali ornia, launched in 2007 wi h a $22 million gif. a unding has been used so ar o signi can ly re-engineer business developmen and licensingopera ions, ex end beyond radi ional echnology rans er o suppor innova orsacross all schools and disciplines, develop programs o und and men or acul y and s uden eams, and promo e a universi ywide cul ure o innova ion.

e key o hese programs is ha hey don ocus exclusively on accelera ingindividual projec s bu ra her on developing li elong innova ion skills and acommuni y o inves ors, en repreneurs, and o her s akeholders. ey can shif

he en ire cul ure a he universi y o celebra e innova ion and en repreneurship.For example, USCs Ideas Empowered program, launched in 2010, engaged 89researchers in he la es round o compe i ion or commercial suppor , despi e

he ac ha receiving a small gran (generally be ween $50,000 and $100,000)requires mon hs o prepara ion and men oring. is demons ra es he appe i e

or many acul y and s uden s o ge involved in commercializa ion i hey believehey will receive he coaching and connec ions wi h he local communi y hey

need o be success ul.

e ederal governmen should consider compe i ive block gran models ha

deploy unding locally and s reng hen innova ion ecosys ems, in addi ion ounding numerous smaller gran s cen rally. Rewiring he Federal Governmenor Compe i iveness, also in his series on science and economic compe i iveness

explores his idea in more de ail. Programs should be consolida ed in a way hamakes hem cos -e cien and e ec ive, and he impac s measured broadly.

The ederal

government

should consider

block grant mod

that deployunding locally

and strengthen

innovation

ecosystems, in

addition to und

numerous smalle

grants centrally.


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IMPACT

In 2009, a policy paper called Innova ion Model Program or Accelera ing heCommercializa ion o echnology, or IMPAC , proposed a $20 million pilo ,

o und 10 innova ion ecosys ems ha would ap in o he in ellec ual capi al

and convening power o universi ies and provide proo -o -concep gran s andmen oring o research projec s.42

e unding rom each demons ra ion gran would complemen exis ing ac ivi iesalready in place a he universi y in order o provide, a a minimum:

Proo -o -concep unding wi h appropria e projec managemen Communi y engagemen , ne working, and eam-building Business s ra egy and men oring (universi ies may engage addi ional s uden s

and curriculum o suppor his) Educa ional resources Media rela ions and showcasing o projec s Measuremen and evalua ion o resul s

is program could provide 10- o-1 or even 20- o-1 leverage on he ederalgovernmen s inves men . I is modeled afer success ul proo -o -concepprograms o USC, MI , UCSD, Georgia Ins i u e o echnology, and he Coul erFounda ion, as described above, which have demons ra ed he abili y o atracou side priva e-sec or inves men many imes grea er han he ederal undinginves ed.

Various agencies have atemp ed o pu or h his ype o approach recen ly. eNa ional Science Founda ions Accelera ing Innova ion Research, or AIR, programand wo i6 programs coordina ed by he Depar men o Commerce are wo cases inpoin , bu nei her is qui e in he orm or scale sugges ed by he IMPAC proposal.

e key is or his unding o be managed rom a local level o engage s akeholdersand provide addi ional value beyond jus he individual gran unding. eprograms would be universi ywide so ha hey would con ribu e o a cul ure

change across all disciplines and ap in o he broades base o research unding.

e need is now acu e. A his poin we mus und his concep beyond a pilolevel; $80 million per year would suppor a leas 40 universi y ecosys ems


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across he coun ry. I pas experience can be a guide, his level o unding couldpo en ially s imula e $1 billion in priva e-sec or inves men in ideas ha wouldo herwise be oo early and risky or inves ors o curren ly be on.


Innova ive capaci y in regions can be s rongly developed wi h universi ies a heircore wi h he ollowing policies:

Provide unding or universi ies o enhance heir innova ion ecosys ems,including proo -o -concep unding and men oring. e 2009 IMPAC policy proposal discusses in de ail how he ederal governmen can suppor his e or , bu wo years la er mus be expanded o suppor dozens o universi ies ormaximum impac . e proposed Depar men o Compe i iveness Common

App, de ailed in Rewiring he Federal Governmen or Compe i iveness, would allow or more speci c IMPAC alloca ion rom hese unding pools.One possible source o unding is described in he leveraging priva e-sec orR&D sec ion below.

Dis ribu e proo -o -concep unding locally, no cen rally, o cen ers wi hinuniversi ies or collabora ive regional en erprises engaging mul iple universi iesand o her s akeholders in o he local ecosys em. Regional innova ionshould no be orches ra ed rom Washing on, D.C. Ins ead, compe i iveblock gran s enable regions o budge and deploy in programs wi h locally developed ou come measures, since regional players unders and bes heir ownoppor uni ies and gaps.

Expand he Na ional Science Founda ions Par nerships or Innova ionprogram as described in he America COMPE ES Ac reau horiza ion, wi h ewer, larger gran s o suppor par nerships be ween larger and smalleruniversi ies, which will crea e a cri ical mass and sharing o bes prac icesnecessary o bols er he program.

Re ocus economic developmen unding on innova ion-based economies, whichhave high grow h po en ial, and ocus on people ra her han in ras ruc ure. emos e ec ive inves men o hese dollars is on he developmen o alen and hene works among innova ors, inves ors, and en repreneurs.


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Enhance he Small Business Innova ion Research and Small Businessechnology rans er program in hree ways consis en wi h curren s a u ory

au hori y: remove he SBIR requiremen o have he primary researcheremployed by he company receiving he gran ; se aside a por ion o STR

unding or proo -o -concep cen ers be ore SBIR phase 1 gran s are awarded;

and par ner wi h local innova ion ecosys ems around universi ies o help selecgran ees and provide men oring and ne working o enhance he e ec iveness o he gran s.

Work wi h governors o ry o address s a e policies ha migh s i e new ven ures rom universi ies; or example, some s a es orbid public ins i u ions

rom aking an equi y s ake in spin-ou companies or limi he en repreneurialinvolvemen o acul y who are s a e employees.

Consider he impac s o developing human capi al as much as he in ellec ual

proper y when measuring he ou comes o universi y research.


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Measuring for success

radi ional echnology rans er measures such as pa en s led andlicensing revenues are inadequa e o convey he impor an consequence o

rans orma ive research o our na ions scien i c and economic developmen andcompe i iveness. Innova ion can have many ou comes, such as:

New knowledge ha can be buil upon New linkages be ween collabora ors New skills in he work orce e abili y or a region o re ain alen and provide jobs o ma ch heir needs New companies, services, and produc s in he service o he public good Economic grow h and employmen

All o hese ou comes boas in rinsic value, and hey requen ly build on eacho her, bu we ofen only measure ha las ca egoryeconomic grow h anddevelopmen wi hou demons ra ing he connec ions wi h he res o heou comes.

ere is a belie ha science leads o grea er innova ion, which leads oeconomic impac , ye i has been di cul o make he link explici ly. Meanwhile,universi ies impac is much broader han simply he rans er o echnologies,43 and academia ofen hesi a es o repor on ou pu s because o ears he da a will underes ima e he ac ual impac s, making i even more di cul o gain henecessary insigh s or policymaking.

Me rics can ocus e or s and drive resul s, bu our abili y o measure innova ionin he Uni ed S a es is s ill very basic. I becomes very di cul o evalua e which

policies succeed and course-correc wi hou an adequa e way o measure ou comes.

We need o develop a much more sophis ica ed unders anding o how innova iongrows, as well as he broad social and economic bene s o innova ion o regionsand socie y as a whole. o beter lead o a sus ainable innova ion, we mus measure


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our inves men s in innova ion accura ely and incorpora e racking in o any newly proposed, in egra ed programs. is sec ion o he paper explores several ways ocomprehensively measure he impac o universi ies, and complemen s he broaderproposals pu or h by George Washing on Universi y visi ing pro essor Andrew Reamer in his paper in his series i led Economic In elligence.

Technology transfer metrics

e Associa ion o Universi y echnology Managers, or AU M, racks he ac ivi ieso universi y licensing o ces. Among he measures mos requen ly ci ed arelicensing revenues, number o licenses execu ed, pa en s led and gran ed, andnumber o s ar -ups based on universi y in ellec ual proper y. ese can be crudemeasures because he value o one pa en , or one license, does no equal ano her.

Addi ional ou comes-based echnology rans er me rics could serve as animpor an indica or o economic ac ivi y, bu hey are rarely measured. Seed

nancing and o al capi al raised by universi y spin-ou companies, or example,re ec he economic impac o companies ormed and provide ou side valida iono he prospec s o grow h. Jobs crea ed, number o produc s reaching marke , andproduc sales would also be valuable indica ors o commercializa ion.

Looking beyond traditional technology transfer metrics

echnology rans er me rics are use ul, bu are limi ed in heir perspec ive. ey do no emphasize he impor an educa ional and service role ha a echnology

rans er o ce and o her universi y innova ion programs can play. e ongoingsuccess o innova ion e or s a he universi y level should be judged based on

heir abili y o enhance all our o he ollowing key areas:

Broadening he impac o he mos promising universi y innova ions hroughpa hways such as commercializa ion, s ar -up orma ion, and indus ry collabora ions

Celebra ing innova ion and en repreneurship, and increasing he en husiasmand engagemen o acul y and s uden s across all disciplines in such ac ivi ies

Developing li elong innova ion and en repreneurial skills


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Developing a local communi y ha suppor s he advancemen o new ven uresand innova ion.

ese are no easy hings o measure, o be sure, bu ha should no s op usrom rying.

Fur her, he universi y echnology rans er o ce, while very impor an , is no heonly knowledge channel a a universi y. Focusing all measuremen s here will nore ec he broader consequences o research. One s udy, or example, nds haideas emerging rom he Massachusets Ins i u e o echnologys engineeringschool ound heir way in o produc s hrough in ellec ual proper y licensing only 7 percen o he ime; o her channels included papers, con erences, collabora iveresearch, consul ing, and s uden s gradua ing and aking posi ions in indus ry.44

For una ely, Sec ion 521 o he America COMPE ES Ac reau horiza ion passed

las year by Congress requires ha he Na ional Science Founda ion con rac wi hhe Na ional Academy o Sciences o ini ia e a s udy o evalua e, develop, or improve

me rics or measuring he po en ial impac o research on socie y. is manda egives he Na ional Academy he exibili y o s udy more broadly he impac s o research and he individuals gradua ing rom ins i u ions o higher learning.

is e or will enable us o cap ure he broader impac s on social well-being andalen developmen as well as he nancial success o rms. E or s o measure he

impac o universi y research ha could bene rom beter me rics include:

Indus rial re erences and reliance on academic publica ions In ormal con ac s be ween universi y acul y and indus rial rms Hiring o universi y gradua es Firm s ar s based on recen gradua es Speci c universi y-indus ry raining collabora ions Con erences Join ly unded research ac ivi ies be ween universi ies and indus ry Con rac research per ormed by he universi y or indus ry emporary exchanges

Indus ry usage o universi y scien i c acili ies New indus rial processes, echniques, and ins rumen a ion ha can be raced o

universi y research Case s udies ha can show clear linkages among indus rial produc s, rms, and

universi y research


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All o hese indica ors are measurableand oge her would give us a much uller view o he consequences o inves ing in scien i c research and developmen .

Ul ima ely, hough, commercializa ion is per ormed no by universi ies bu by rms in he priva e sec or, which makes i di cul o pu an economic value

on ou pu s and direc ly link hem o economic and o her ou comes. We need asys ema ic approach o measure he impac o research or programs ha suppor business innova ion, such as echnology rans er o ces and incuba ors.

One promising approach has been developed by he Evidence Ne work, a Canadianrm ha works wi h innova ion in ermediaries o assess heir impac s along

dimensions such as in orma ion ow, linkages, and servicesusing a survey- based approach o ask priva e-sec or clien s o ra e how hese innova ion-rela edimpac s suppor ed ou comes such as revenues, employmen , and inves men .So ar i s me hodology has been used by a varie y o clien s, such as research and

developmen ins i u es, echnology commercializa ion programs, and economicdevelopmen organiza ions.45 I has provided a means o quan i y and mone ize heimpac o hese organiza ions ha o herwise would nd i very di cul o assess

heir value, and o rigorously demons ra e he connec ion be ween heir impac oncompany innova ion and heir impac on marke per ormance.

Al hough pa en ing and licensing provide an impor an avenue or headvancemen o some innova ions, he impac s o universi y research will be vas ly underes ima ed i only measured hrough radi ional echnology rans erme rics. We need a much more sophis ica ed unders anding o he di use socialand economic bene s o innova ion clus ers o regions, which hese measuressugges ed above would accomplish.

Measuring sustainability through talent and linkages

Inves men s in scien i c research do no guaran ee shor - erm economic grow h, bu are essen ial o long- erm compe i iveness. How, hen, can he ederalgovernmen measure success in he shor erm? One way is by measuring knowledge

and skill developmen and he growing linkages be ween people and ins i u ions, which would enable us o unders and bo h he sus ainabili y o an innova ionecosys em and i s abili y o address more and more complex global challenges.

Although

patenting and

licensing provide

an important

avenue or theadvancement o

some innovation

the impacts o

university resear

will be vastly

underestimated

i only measured

through tradition

technology trans

metrics.


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is will be a complica ed endeavor, bu undamen ally a projec or ins i u ionsabili y o ca alyze new linkages be ween researchers and indus ry adds value o heinnova ion ne work or ne works in which i resides. us a collabora ion indexcould look a new connec ions crea ed as a resul o he research inves men omeasure hese linkages.

Advancemen s in social ne working in par icular could be used o rack headvancemen o alen and connec ions be ween researchers and ins i u ions. epro essional social ne working si e LinkedIn, or example, allows individuals oprovide in orma ion abou heir pro essional careers and connec ions and connec wi h one ano her. A si e like his could be used o provide insigh in o he pa h o gradua es in he work orce and enhanced linkages as a resul o research projec s.I could also be used o s imula e some o hese connec ions.

Ul ima ely, he rue es o innova iveness is our abili y o be par o he global

in ellec ual conversa ion, and i would be valuable o do a s udy across indus rieso analyze he in uence o he Uni ed S a es and see how i is shifing. Looking a

where he op scien is s and o her exper s are born, rained, and employed would be impor an o unders and. Based on policy decisions in he pas decade or wo,one could specula e ha cer ain areas such as clima e science and regenera ivemedicine migh demons ra e a signi can waning o in uence, while our exper isein compu er science may s ill be s rong. S udies should be conduc ed o valida e whe her his is indeed he case.

Measuring he U.S. in uence in a varie y o indus rial and scien i c sec ors as wellas our human capi als capaci y o innova ive could lead o policy recommenda ions

ha would help us regain and main ain compe i iveness and projec policy impac slong be ore he direc impac s are recognized. We migh be able o iden i y hecapaci y o innova e long be ore he direc impac s are recognized.

Creating the measurement infrastructure

Curren ly, some innova ion and economic da a exis , bu in di eren in orma ion

echnology sys ems wi hin separa e agencies in he ederal governmen and wi hdispara e s andards and no easy way o share hem. Fur her, much o he da a arecollec ed in an ad hoc manner and are ofen survey-based. is lowers he quali y and increases he resources required o supply i .


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Wha we need are microda a on individual research projec s, on one s andardpla orm ha is accessible o researchers who can analyze he rela ionship be weeninpu s such as unding, suppor s such as skills, and ou pu s such as produc sand employmen . We can learn rom he Brazilian da abase o researchers andins i u ions called Lates. Launched in 1999, Lates is a public ne work ha

enables he accura e racking o knowledge and innova ion ac ivi ies. is vir ualcommuni y has now been in roduced in many coun ries o include more han 1.7million regis ered CVs o researchers a more han 14,000 ins i u ions. All da a,excep or personal in orma ion, are public. is da abase provides a pla orm

or assessing research ac ivi ies na ionally; users can loca e o her collabora orsand exper ise, iden i y and evalua e compe encies, charac erize ne works andconnec ions, and evalua e ou comes rom individual research inves men s.46

e Na ional Science Founda ion and he Na ional Ins i u es o Heal h have begun a laudable e or called S AR ME RICS ha works wi h universi ies and

o her research ins i u ions o collec accura e and consis en microda a abouresearch projec s so i can be analyzed. O her e or s have been aken on by individual researchers, such as he da abase developed by Universi y o Cali ornia,Davis pro essors Mar in Kenney and Donald Paton on ini ial public o erings;

he da a ga hered on he produc ion o scien is s by economic pro essors PaulaS ephan a Georgia S a e and Sharon Levin a he Universi y o Missouri-S .Louis; and an upcoming pa en da abase developed by Harvard Business Schoolpro essor Lee Fleming and his colleague Ve le orvik a he Universi y o Chicago.

ese sources could be analyzed alongside U.S. In ernal Revenue Serviceindividual and corpora e ax da a, da a rom he U.S. Pa en and rademark O ce,and o her publicly available da ase s. Individual privacy could be main ained while providing insigh in o innova ion rends.

Despi e he need and oppor uni y, no organiza ion exis s o ocus on hemeasuremen o innova ion. Such an organiza ion would be able o ie in o all hedispara e sources o da a and begin o rela e ederal research inves men s o social,scien i c, and economic ou comes, and o pain a rich pic ure o he impac s o various policy decisions and research inves men s.

o bes capi alize on his oppor uni y, an O ce o Innova ion Analysis should becrea ed. is o ce could repor direc ly o he Assis an Secre ary or EconomicPolicy in he Depar men o reasurys O ce o Economic Policy, paralleling he way he O ce o ax Analysis repor s direc ly in o he O ce o ax Policy.

Despite the need

and opportunity,no organization

exists to ocus o

the measurement

o innovation.


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While his sugges ion goes beyond he more immedia e policy recommenda ionso my colleague Andrew Reamer in his paper i led Economic In elligence, hegoals are he same


We can improve our abili y o ca alyze and accelera e innova ion i we ocus onappropria e me rics or measuring success. Among he ways o do so are o:

Implemen new me rics o measure he consequences o research andindividuals gradua ing rom universi ies, as manda ed by he recen ly passed America COMPE ES Ac . De ne he me rics in a way o ensure hey more broadly re ec universi ies e ec iveness in growing ecosys ems and capaci y

or sus ainable impac , hrough licensing and s ar -up crea ion, eachingcommercializa ion skills, broadening engagemen across he research

communi y, developing linkages wi hin he universi y and wi h he broaderinnova ion ecosys em ou side he universi y, and success ully sharing andimplemen ing bes prac ices.

Con inue he ederal S AR ME RICS e or s o measure microda a on researchinves men s.

Es ablish an independen O ce o Innova ion Analysis wi hin he O ce o Economic Policy in he U.S. reasury o develop an ongoing mechanism ormeasuring innova ion in he Uni ed S a es.

When evalua ing he success o licensing e or s, look beyond radi ional me ricssuch as pa en s and license revenues o more ou comes-based measuremen sand include educa ion and service as par o he core mission o echnology

rans er o ces.

When measuring knowledge rans er, consider broader mechanisms such aspublishing, par icipa ion in con erences, collabora ive research, consul ing, ands uden s gradua ing and aking posi ions in indus ry.

Inves in developing new me hodologies or measuring linkages be weenresearchers, indus ry, and ins i u ions. Leverage new social media ools or

racking ne work-based in uences and consider crea ing a collabora ion indexo measure he ull impac o he ows o knowledge.


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Reward universi ies ha show commi men o en repreneurship and innova ion.Prizes and o her shor - erm incen ive ini ia ives have he capaci y o work, bugenerally more sus ained program ini ia ives such as Par nerships or Innova ionand o her more recen unding e or s have a much more rans orma ive e ec

or universi y cul ure and impac .


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Preparing for shiftsin competitiveness

New rms are essen ial or job crea ion in he Uni ed S a es.47 Since he beginningo he Grea Recession in 2007, however, new companies are launching wi h ewerresources and crea ing ewer jobs. is jobless recovery is raising ques ions o anew normal, where ewer workers are needed o per orm higher levels o work,and work is increasingly becoming reelance and ransi ory.

For corpora ions, compe i ion is in ensi ying on a global scale, cus omer loyal y is

declining, corpora e re urns on asse s have dropped o less han a quar er o whahey were a ew decades ago, s ock prices are much more vola ile, and churn inhe S&P 500 is accelera ing.48 Amid all his change, echnology is accelera ing a

ra es never seen be ore, wi h implica ions ranging rom educa ion o in ellec ualproper y law. Increasingly, ideas ow seamlessly across ins i u ional andin erna ional boundaries. Value is increasingly crea ed by he ow o knowledgera her han he ownership o knowledge.

e u ure o economic grow h, hen, will probably res less in individualcorpora ions and more in ne works o suppliers and cus omers. Similarly, s ockso knowledge, such as individual pa en s and rade secre s, will have less and less value as he ow o ideas wi hin hese ne works gain in uence. is underscores

he impor ance o re aining as much o he value chain as possible in heUni ed S a es. Bu i is also is a reminder ha we mus adjus o a new reali y o coopera ion as much as compe i ion.

A separa e compe i iveness issue is our ven ure capi al indus ry. Over he passeveral decades i has s imula ed ecosys ems, aken risks, and inves ed in leanand agile s ar ups. Bu due o heir 10-year und ime horizons, hey need o

show re urns in heir inves men s wi hin abou ve years. is resul s in muchless pa ience or more groundbreaking scien i c inves men s, hus depending on

ederal unding even more or pre-commercial innova ion.


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en heres he revolu ion occurring in manu ac uring. In much he same way hanew digi al ools have democra ized media and journalism, a new parallel revolu ionis enabling people o crea e and share in he physical world, providing bo h hreaand oppor uni y. e up-and-coming maker cul urehighligh ed in Cory Doc orows sci- novel, Makers , and Chris Andersons ar icle In he Nex Indus rial

Revolu ion, A oms Are he New Bi s inWiredmagazine in 201049

may becomehe nex indus rial revolu ion. is revolu ion is powered by a new box o oolsaccessible o anyone: $2,000 wor h o compu er numerical con rol machine oolsand $1,000 in MakerBo 3D prin ers, easy- o-program microcon rollers such as he Arduino, and micro ac ories and global supply chains ready o manu ac ure and shipsmall ba ches o a new produc anywhere around he world. ese ools are available

oday and are already being used o launch new produc s and companies, such asSquare, he high-grow h s ar -up company ha sells special credi card readers haenable anyone wi h an iPhone o accep credi card paymen s.

A he same ime, a revolu ion is happening in in orma ion. Wi h vas volumeso da a becoming more and more accessible, i provides perspec ives noavailable be ore. Enormous da abases o personal da a wi hin echnology companies such as Google and Facebook enable new insigh s in o human behavior, hough , and language.

Meanwhile, corpora ions ranging rom s ar -up company 23andMe o es ablishedpharmaceu ical companies are ga hering and mining gene ic in orma ion aan increasing ra e. Gene ic in orma ion rom issue banks combined wi hlongi udinal pa ien da a can enable he rapid discovery o biomarkers ha canlead o beter and as er cures hough enhanced diagnos ics, pa ien s ra i ca ion,and enhanced ou come measures.

Universi ies unique cul ure o da a sharing and open access o da a on he onehand, and he richness o available da a ... rom he scope o research ques ions o

he number and diversi y o pa ien s s udied ... on he o her will ur her increasehe role o universi ies in he u ure. Biomedical innova ion is becoming jus

as much abou da a analysis as i is abou biology. ese shifs will likely havesigni can implica ions on he way science is conduc ed in he u ure.

As a resul o all o hese changes, i is wor h re hinking our assump ions aboupolicy and looking o experimen s ha migh lead o revolu ionary, no evolu ionary,change. Some o hese ques ions are addressed in a separa e sec ion below.

Universities uni

culture o data

sharing and open

access to data on

the one hand, and

the richness o

available data ...

rom the scope o

research question

to the number an

diversity o pati

studied ... on the

other will urthe

increase the role

o universities in

the uture.


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Policy issues to consider

Many o hese shifs are only now un olding, and we will no know heir ull ex enrigh away. As a resul , he policy implica ions are no comple ely clear. Ye weshould already begin o hink di eren ly and look o revolu ionary change. Jus a

ew examples, which are mean o be illus ra ive, include he ollowing: Develop policies ha suppor he democra iza ion o ools, new abrica ion

acili ies, and new ways o manu ac uring across all elds rom nano echnology o bio echnology. Explore he role o craf in researchmeaning he hands-on

skills necessary o build ins rumen a ion and experimen s, leading o grea erinsigh s and innova ion during he process o researchand do a survey on

ools and ransna ional projec s o enable ha craf.

Improve access o manu ac uring and pro o yping acili ies or universi y

communi ies. ese acili ies can also provide access, along wi h rainingprograms, o residen s o any job-s arved neighborhoods nearby.

Enable linkages and coopera ion among universi ies on a global basis now ha innova ion is global. ink o collabora ion more han compe i iveness

consider win-win solu ions ra her han a zero-sum-game; new innova ions willprovide beter quali y o li e and grow he global economy in ways ha willprovide oppor uni ies o everyone.

Push oward more open da a publishing requiremen s. is could includeincen ives or researchers working on hypo hesis-driven projec s who wouldo herwise wai un il afer hey have analyzed heir da a and published heirconclusions o accelera e publishing raw da a.

Enable new pla orms across many disciplines, such as personalized medicine, ocapi alize on a new, low-cos , ne worked, and open ype o innova ion, similar o

he innova ion ha was enabled by he In erne .

Consider new in ellec ual proper y policies ha maximize innova ion

wi hin his ramework as appropria e, which relies less on pro ec ion hanon encouraging sharing. Develop ways o beter measure and reward ows o in orma ion, ra her han s ocks o in orma ion (such as pa en s).


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Change unding and collabora ion models as he world becomes increasingly complex. As so-called wicked problems such as global clima e change,homeland securi y, and heal h require collabora ion across numerous disciplinesand con inen s, explore how ransac ion cos s be ween collabora ors can bereduced.50 Drive new modes o digi al scholarship, where he resul o a s udy

can be published in mul imedia or o her orms ha canno be pu on a shel inhe s acks o he library.

Crea e incen ives or longer-horizon ven ure capi al unding models.

Reconsider peer review o increase risk- aking and ou -o - he-box ideas romedge hinkers. Crea e incen ives or in erdisciplinary projec s and remove enure barriers or boundary-spanners and non radi ional academics.

Consider incen ives or al erna ive models o he radi ional enure clock ha

would enable early-career risk- aking, such as he 10-year con rac s a heHoward Hughes Medical Ins i u e.

ese recommenda ions will require more hough and involvemen by a widerange o s akeholders, and will likely no be easily in uenced by na ional policy alone. Bu hese issues should be kep in mind as we consider revolu ionary, ra her

han evolu ionary, change.


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Conclusion

Despi e our na ions repu a ion or i s innova iveness and en repreneurial spiri , we are alling behind and s ruggling o compe e in he global marke place. e vasmajori y o economic grow h in America arises rom echnological innova ion, which depends heavily on research universi ies. We have an urgen need o supporuniversi y researchbo h undamen al and appliedand he in orma ionne works and innova ion ecosys ems ha undergird and emerge rom i .

We have an oppor uni y oday o ake advan age o a grea resource ha is heenvy o he world, our higher educa ion sys em. In order o do so, we mus invesin basic research ha :

Crea es new knowledge and new alen Suppor s pa hways or knowledge and echnology ransla ion Helps ca alyze innova ion ecosys ems ha have universi ies a heir core Atrac s and rewards he deploymen o indus ry resources Develops new ways o measure success

In addi ion, we mus keep our eye on he changing landscape o innova ion and makesure ha our policies and ins i u ions are well-equipped o ake advan age o heseshifs, and where possible drive a new model or innova ion in he 21s cen ury.


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About the author

As vice provos or innova ion a he Universi y o Sou hern Cali ornia andounding execu ive direc or or he USC S evens Ins i u e or Innova ion, Krisz ina

Z Holly leads a eam o more han 30 o ransla e USCs mos groundbreaking

ideas o marke and develop educa ional programs o help acul y and s uden smake maximum impac wi h heir ideas. Holly cura es EDxUSC, he originalindependen ly organized ED even ha has spawned more han 2,000 similareven s worldwide.

Her columns have appeared in BusinessWeek, he Hu ng on Pos , CNN.com,and Forbes. Be ore USC, Holly was an engineer and en repreneur. Also, as he

ounding execu ive direc or o MI s Deshpande Cen er or echnologicalInnova ion, she helped spin o nine s ar -up companies rom MI research haraised more han $40 million in ven ure capi al. Named one o he Champions

o Free En erprise by Forbes in 2010, she serves on various advisory boards inhe Uni ed S a es and abroad, including he U.S. Na ional Advisory Council on

Innova ion and En repreneurship.

Acknowledgements

e au hor would like o o er special hanks o hose who reviewed por ionsor all o his paper, including in alphabe ical order: Brian Barge ( e EvidenceNe work), Linda Bernardi (Cloudan , Inc.), Johanna Blakley (Universi y o Sou hern Cali ornia Norman Lear Cen er), An hony Boccan uso (Na ional Academies Universi y-Indus ry Demons ra ion Projec ), Claude Canizares(Massachusets Ins i u e o echnology), Michael Crow (Arizona S a eUniversi y), Joichi I o (Crea ive Commons, MI Media Labora ory), GururajDesh Deshpande (A123, Spar a Group LLC), Brad Feld ( e Foundry Group), Jenni er Grodsky (Universi y o Sou hern Cali ornia), Randolph Hall (Universi y o Sou hern Cali ornia), Mark Ha ch ( echShop, Inc.), Alan Kay (Viewpoin sResearch Ins i u e), Carl Kesselman (Universi y o Sou hern Cali ornia), CesarHidalgo (Massachusets Ins i u e o echnology), Julia Lane (Na ional Science

Founda ion), Michael Led ord (Lewis-Burke Associa es LLC), Ellen Levy (LinkedIn), Bob Me cal e (Polaris Ven ure Par ners, Universi y o exas Aus in),S eve Moldin (Universi y o Sou hern Cali ornia), William Ouchi (Universi y o Cali ornia, Los Angeles), Ed Paisley (Cen er or American Progress), Andy Rappapor (Augus Capi al), Paul Rodeno (Securi y Business Bank o San Diego),


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Duane Ro h (CONNEC ), John Seely Brown (Universi y o Sou hern Cali ornia,ormerly Xerox), Larry Smarr (Cali ornia Ins i u e or elecommunica ions and

In orma ion echnology), obin Smi h (Associa ion o American Universi ies),Mark S evens (Sequoia Capi al,) Charles Ves (Na ional Academies), and Mary Walshok (Universi y o Cali ornia, San Diego).

Members o our ask orce on science and compe i iveness provided cons ruc ivecri icism, eedback, and ideas indispensable o his series. In par icular, James

urner, Neal Lane, Brian Kahin, Ar i K. Rai, Rachel Levinson, Daniel Sarewi z, John Alic, and Chris Hill provided cri ical eedback. Finally, his series would alsono have been possible wi hou impor an and subs an ive con ribu ions romSarah War ell, Michael Etlinger, Ji inder Kohli, Ka e Gordon, and Reece Rushing.


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Agrawal, Ajay, and Rebecca Henderson. 2002. PutingPa en s in Con ex : Exploring Knowledge rans er romMI . Managemen Science48 (1): 4460. Available ahtp://mansci.journal.in orms.org/con en /48/1/44.shor .

American Academy o Ar s and Sciences (AAAS).2008. ARISE: Advancing Research in Science andEngineering. Cambridge. Available a htp://www.amacad.org/AriseFolder/.

Associa ion o Universi y echnology Managers. 2010.AU M U.S. Licensing Ac ivi y Survey: FY2009.Deer eld.. Available a htp://www.au m.ne / AM/ empla e.c m?Sec ion=Licensing_Surveys_ AU M&CON EN ID=5239& EMPLA E =/CM/Con en Display.c m.

A kinson, Rober , and Scot Andes. 2009. e A lan icCen ury: Benchmarking EU and U.S. Innova ionand Compe i iveness. Washing on: e In orma ion

echnology and Innova ion Founda ion. Available ahtp://www.i i .org/ les/2009-a lan ic-cen ury.pd .

Bureau o Economic Analysis. 2010. Research andDevelopmen Sa elli e Accoun (1998-2007 researchand developmen da a). Depar men o Commerce. Available a htp://www.bea.gov/na ional/newinn

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