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Technology Transfer andCommercialization Partnerships

Diane Palmintera, President

Innovation [email protected]

Presented to The President’s Council of Advisors on Science and

Technology15 August 2007

Copyright pending Innovation Associates Inc. 2007

The statements and recommendations herein are solely those of the presenter and do not represent

those of any other individual, institution or agency.


Federal Policies to Stimulate University Technology Transfer

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The Bayh-Dole Act of 1980 accelerated university

technology transfer by establishing a uniform federal

invention policy that permitted universities to retain title to

inventions developed through federally funded research.

At least 158 U.S. universities* conduct technology transfer

activities including filing patents, trademarks and

copyrights, and executing licenses. Most also provide

some support to launch startups.

*(Represents the number of firms responding to the 2005 AUTM Licensing Survey.)

Technology Transfer & Commercialization Partnerships


Universities are a source of licensed innovations and business startups. Based on the latest AUTM Licensing SurveyTM:

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Since FY 1998 (to FY 2005), 3,641 new products based on

academic inventions have been introduced to the market.

In FY 2005, universities executed 4,201 licenses and

options.

Since FY 1980 universities and research institutions have

launched 5,171 new companies; and in FY 2005 alone, 400

startups were launched.



In the past two decades, technology transfer and commercialization activities in universities have sky- rocketed.

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From FY 1996-2005, universities have more than

quadrupled the total number of active licenses, and almost

doubled the number of licenses executed each year.

From FY 1996-2005, universities have more than doubled

the number of startups launched each year.



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Source: AUTM Licensing Survey™, FY 1996, FY 1997, FY 1998, FY 1999, FY 2000, FY 2001, FY 2002, FY 2003, FY 2004, FY 2005; Innovation Associates..

Note: Licenses Executed represents the number of total licenses/options executed during the specified year as reported by the institution in response to the AUTM Licensing Survey™. The number of institutions reporting to the AUTM Licensing Survey™ varies each year; N equals the total number of institutions reporting for the specified year. The number of institutions reporting to the AUTM Licensing Survey™ varies for each year: 1996 N=131, 1997 N=132, 1998 N=132, 1999 N=139, 2000 N=142, 2001 N=142, 2002 N=156, 2003 N=165, 2004 N=164, 2005 N=158. .


Graph 1 Licenses and Options Executed by U.S. Universities

(FY 1996-2005)

1500

2000

2500

3000

3500

4000

4500

5000


I ATechnology Transfer & Commercialization Partnerships

Source: AUTM Licensing Survey™, FY 1996, FY 1997, FY 1998, FY 1999, FY 2000, FY 2001, FY 2002, FY 2003, FY 2004, FY 2005; Innovation Associates. Note: Startups Launched represents the number of startup companies formed during the specified year that were dependent upon the licensing of the institution’s technology, as reported by the institution in response to the AUTM Licensing Survey™. The number of institutions reporting to the AUTM Licensing Survey™ varies each year; N equals the total number of institutions reporting for the specified year.

Graph 2Startups Launched by U.S. Universities

(FY 1996-2005)

150

200

250

300

350

400

450



U.S. Startups Averaged over Five Years (FY 2000-2004)*

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MIT stands out from the others – it launched an average of 24 startups per year.

The top 10 U.S. universities were:1) Massachusetts Institute of Technology2) University of California3) California Institute of Technology4) Georgia Institute of Technology5) Stanford University6) University of Michigan7) University of Illinois, Chicago, Urbana8) University of Pennsylvania9) University of Southern California10) University of Minnesota

*(AUTM; Innovation Associates)



We get a different picture when we take into account research expenditures.

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In FY 2005, the top 10 U.S. universities executing licenses, relative to research expenditures were*

1) Iowa State University2) Brigham Young University3) Duquesne University4) North Carolina State University5) University of Oregon6) University of Toledo7) New Jersey Institute of Technology8) Western Kentucky University9) Stevens Institute of Technology10) Montana State University




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In FY 2005, the top 10 U.S. universities launching startups, relative to research expenditures were

1) Brigham Young University2) Stevens Institute of Technology3) University of North Carolina at Charlotte4) University of Texas, Arlington5) Duquesne University6) University of Akron7) University of Toledo8) Catholic University9) Creighton University10) Arizona State University



Successful technology transfer outcomes are built on substantial, excellent and strategically focused research.

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R&D expenditures at U.S. universities have increased

dramatically – expenditures in FY 2004 were five times

higher than in FY 1984.*

Federal government has been the main source of funding,

representing 64% of university research expenditures in FY

2004.*

HHS funded a little more than half of all research

expenditures.*

*(NSF/Division of Science Resources Statistics)



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Life sciences represented 60% of all research expenditures

to U.S. universities, and its share has grown steadily.*

About 5% of research expenditures in U.S. universities came

from industry. Until FY 2005, industries’ share of university

research expenditures had declined for several consecutive

years; in FY 2005, the share was about the same as in FY

1983.**

*(NSF/Division of Science Resources Statistics); **(NSF InfoBrief, NSF 07-311, January 2007).



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Technology transfer outcomes (except license income)

correlate significantly with research expenditures at U.S.

universities.

Logically, U.S. patents represent the highest correlation.

Cumulative active licenses and licenses executed also

highly correlate with research expenditures.

Startups positively correlate with research expenditures.



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Source: AUTM Licensing Survey™; Innovation Associates. Note: Pearson correlations (r =) of technology transfer outcomes with FY 2005 research expenditures. Outcomes are reported by U.S. universities and colleges responding to the FY 2005 AUTM Licensing Survey™.


Technology Transfer OutcomesU.S. Universities

FY 2005

CorrelationTo ResearchExpenditures

Licenses & Options Executed (N=151)

.779

Cumulative Active Licenses (N=150)

.804

Startups Launched (N=147) .667

U.S. Patents Issued (N=150) .846

Patent Applications (N=150) .733

License Income (N=150) .196

Table 1


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Many universities successful in technology transfer (T2)

have identified and targeted core research strengths, and

developed strategic plans to build and leverage those

strengths.

This is particularly important for universities that have more

modest research expenditures. Universities such as

Brigham Young U., U. of Akron (polymers), Rensselaer

Polytechnic Institute (engineering), and Alfred U. (ceramics)

have been successful in T2 despite modest budgets.



Multiple internal and external factors affect the university’s success in technology transfer.

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Leadership from the university President is often seen in

universities successful in technology transfer. Moreover,

hiring and reward systems impact outcomes as well as

support for an “entrepreneurial culture.”

Universities that understand and are responsive to

differences in corporate missions, timeframes and

communication styles are more likely to have successful

research collaborations and T2 outcomes.



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Building on-going relationships with corporations can

facilitate licensing activities, sometimes years later.

Building positive relationships with corporations can

involve promoting flexible and responsive research

collaborations, participation on advisory committees and in

entrepreneurial activities, providing product development/

improvement services and facilities, etc.



Entrepreneurial-engaged universities provide or facilitate access to a range of services.

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Universities successful in commercializing technologies

and launching startups understand that engineers and

scientists make poor business people and address this

weakness.

Entrepreneurial-engaged universities provide, or facilitate

access to sources of risk capital, management capacity

building, incubation and networking. They also connect

these activities to startups being launched by technology

transfer offices.



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Successful technology transfer offices often have close

linkages to private seed/venture capital firms. Successful

offices facilitate linkages between researchers and these

firms, early in the process.

Entrepreneurial universities sponsor or encourage linkages

to enterprise forums or “springboards” that screen, mentor

and showcase promising academic entrepreneurs to

potential investors.



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An increasing number of U.S. universities have seed capital

funds that invest in university-based entrepreneurs.

Effective funds not only provide capital but also build

management capacity.

Some universities also have commercialization funds

designed to advance research to near-market stages.

Incubators and research parks provide “platforms” for other

entrepreneurial services.



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Entrepreneurs-in-residence and mentors provide invaluable

input and guidance.

Business plan competitions are popular mechanisms to

mentor and showcase university entrepreneurs to potential

investors.

Networking opportunities may be the most important

element – they facilitate invaluable interaction between

entrepreneurs, service providers, and potential investors,

partners and customers.



Corporate and Foundation Partners

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Foundations play an important role by funding Innovation

Centers and entrepreneurial activities in some universities

and regions. (Pittsburgh, St. Louis, and others.)

Successful entrepreneurs as well as major corporations

have become major funding sources for centers on

entrepreneurship and new/enhanced S&T programs. (MIT,

BYU, ISU, RPI, and others.)



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Corporations primary support is sponsored research, but

that support is waning in some universities. This may be

caused, in part, by institutions tightening the technology

transfer reins.

Other seemingly unrelated industry services such as

extension services build credibility and trust that may have

long-term payoffs including increased technology transfer

outcomes.

Corporate involvement can have a “down-side” by exerting

too much influence over the direction of some institutions’

research.



Community and State Partners

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By providing funding for R&D Centers, particularly industry-

university centers, some states have effectively leveraged

federal funds. (NYSTAR’s CAT program is a good example.)

Communities often provide funding, zoning, etc. to support

incubators, and states play a larger role in supporting

research parks in and around universities.




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In some states, fund-of-funds and other funds and

incentives focus on increasing seed capital and filling early-

stage capital gaps.

Angel funds can supplement other forms of funding but

often do not provide critical business

mentoring/substitution needed.

State governors and legislatures have become increasingly

interested in leveraging academic institutions for economic

development purposes. In some cases, this has influenced

the focus of the institutions’ commercialization activities.


The Federal Government as a Partner

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The federal government’s primary role involves funding a

full range of research in universities. This research feeds

the technology transfer pipeline and has a direct impact on

the extent and type of commercial outcomes.

The federal government traditionally has been reluctant to

support the “commercialization side” of research despite

its rising expectations regarding commercialization

outcomes. This is true for SBIR/STTR and other programs.




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This funding reluctance also holds true for “softer”

research-related activities such as partnerships and

initiatives in which outcomes are not easily quantified.

Some federal programs are outmoded and could more

effectively support technology transfer and entrepreneurial

development. (NSF EPSCoR and SBA SBDCs are two

examples.)

Some federal programs that have provided useful services

have been eliminated, cut or annually threatened. (OTA,

ATP, MEP)


Outstanding Issues & Factors that Impede Commercialization

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“Valley-of-Death” gaps:

• technology maturation, acceleration, and adaptation

• early-stage capital

• business/management capacity in S&T startups

Conflicting goals between corporations and universities

Wide gap in technology transfer capacity among different

regions and institutions – institutions such as HBCUs are

left out



What is Needed

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Provide greater support and flexibility for

commercialization in federal programs such as SBIR/STTR

Implement initiatives that promote experimentation and

pilots to address various “valley-of-death” gaps

Increase federal incentives to promote regional approaches

to innovation and technology transfer



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Implement mentoring programs in technology transfer and

entrepreneurial development that transfer knowledge from

top universities to emerging universities

Develop entrepreneurial mentoring programs that tap

successful entrepreneurs to act as entrepreneurs-in-

residence and provide ad-hoc advisory services



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Create incentives to stimulate early-stage capital

investments, particularly in areas that now have little

access to such capital

Educate academic institutions, state legislatures,

corporations, and others regarding technology transfer

Develop better metrics to guide institutions and policy

makers

Collect, evaluate and disseminate best practices



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Enhance linkages between federal agencies and university

technology transfer to increase transitioning opportunities

Broaden the view of innovation and give greater

recognition to a wide range of institutions that contribute

to innovation and the transfer of knowledge

Promote better linkages between institutions that provide

different levels and types of innovation-related value



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Technology Transfer and Commercialization Partnerships

Funded by NSF/PFI, this report highlights lessons, recommendations, and cases on emerging academic institutions. (Coming in September 2007)

Accelerating Economic Development Through University

Technology Transfer and Commercialization

This report focuses on the best practices of nine nationally-known research universities. It explores their technology transfer and related entrepreneurial activities, and community and state infrastructure.

Download From IA’s Website:



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Partners on a Mission: Federal Laboratory Practices Contributing to Economic Development

Funded by DOC/OTA, this report shows innovative federal laboratory practices that support technology transfer and promote economic development.

Developing High-Tech Communities: San Diego

This exhaustive study on San Diego demonstrates how one community quickly converted its threatened economy into one of the nation’s most robust, high-tech economies. Funded by SBA/Office of Advocacy.

Download From IA’s Website:



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