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By Sean Pool and Matt Van Itallie
Canterbury Road Partners
For many leaders of our nation’s research universities, 2013 arrives with daunting challenges. Federal budget cuts threaten funding of core research. Recent graduates face uncertain career prospects, and many will have to move out of state to seek opportunities. And the communities surrounding and supporting these institutions are facing mixed economic recoveries.
To tackle these interrelated challenges, many universities are looking to technology transfer as part of the solution. This approach makes sense: Technology transfer holds great promise to help universities address these interrelated research, funding, and economic challenges. By licensing university technologies to existing companies or new start-up companies, forward thinking university leaders can:
- ensure that a university’s research discoveries make the biggest possible economic and social impact in the world;
- increase the return on investment from university research; and
- stimulate a stronger culture of innovation, entrepreneurship and new technology-based job opportunities in the local community.
We spent 2012 conducting research and talking with over 800 technology transfer stakeholders — including technology transfer practitioners, academic researchers, students, entrepreneurs, government officials and economic development officials. We wanted to understand what was working and what could be improved.
Clearly, some schools — like Stanford, MIT, or the University of Wisconsin — have developed vibrant and ambitious technology and entrepreneurship ecosystems organically. We wanted to find out why, and why other research institutions with equally robust research agendas have not. We also wanted to better understand the mechanisms by which some ambitious schools, such as Johns Hopkins University and the University of Alabama, were able to double or triple key technology transfer performance metrics in just a few years.
Research points to “resolutions”
Overall, our research confirmed the findings of one important study released earlier this year by Sterling Partners and Bain & Company, which found that “many college and university presidents feel that technology transfer offices are the custodians of some of their institution’s most underleveraged assets.”1
But more importantly, over the course of these conversations we also identified some best practices and patterns of what works and what doesn’t. In the spirit of the season, we’ve synthesized our findings into five New Year’s resolutions that research universities can adopt to get the best bang for their technology transfer buck in 2013:
Resolution 1: Value science and scientists. This may seem incredible to believe, but in our conversations we heard stories of researchers who were paired with commercialization partners who couldn’t be bothered to visit the laboratory, or who were asked to make unrealistic time commitments to a new start-up. Yes, science and business are quite different fields. But there must be a partnership for technology transfer to be successful, and any partnership must begin with mutual respect.
Resolution 2: Tap the creative power of students. A Kauffman Foundation report earlier this year2 said it best: “Our study of university commercialization efforts suggests that graduate and post-doctoral students are critical participants in university spinoffs.” The report also suggested that “these efforts also have the potential to inspire the future entrepreneurs who will bring continued innovation and growth to our economy.” It’s critical for research universities to find mechanisms to actually connect students to join and participate in university technology-based start-ups.
Resolution 3: Use tools to do more. While technology transfer can deliver a significant upside, the reality is that universities are facing severe financial constraints and must make their dollars go farther. As technology transfer portfolios at even midsized universities can be expansive, the task of bringing on technical experts to thoroughly vet every possible market opportunity is daunting.
One of the most interesting new ways to efficiently support technology transfer is to use advanced software tools that can help systematize the evaluation of commercialization potential. Analysis has shown, for example, that forward patent citations (references made by future patents) are a strong indicator of economic value. So ranking patents by the number of forward citations can help prioritize — though, critically, not decide — which innovations might have more value. Sophisticated tools like these exist today and use a number of sources of data and analytic techniques to sort not only patents but also research articles and can help support technology transfer efforts.
Resolution 4: Think big. Insteadof setting a straight-line goal for technology transfer, say, of a 10% one-year increase in licenses, universities could consider lofty, almost outrageous goals. This would have the benefit of galvanizing the entrepreneurial ecosystem and encouraging all participants to think differently.
For example, our analysis suggests that most larger research institutions could launch 100 or more local technology start-ups in 12 months based on their own inventions. This is especially true if those institutions formed consortia of universities and/or national labs to help. Of course, most technology start-ups will not result in a large company. But creating many start-ups would have the benefit of jumpstarting an entrepreneurial ecosystem. The “worst” case would be that hundreds of professors and students will have meaningfully tried out entrepreneurship, and many would be primed to start or join another venture. That would seed a virtuous cycle of innovation and talent retention in the university community.
Resolution 5: Measure, measure, measure. No matter what else a TTO decides to do in 2013, it should develop meaningful metrics for its technology transfer goals and then collect data to measure progress. As always, the best metrics are clear, comprehensive, and conclusive. Two that we particularly recommend are:
— 90% of students who express an interest in entrepreneurship are connected to an opportunity on or near campus; and
— 75% of high-value innovations are matched to a commercialization partner.
With metrics and performance data in hand, universities can measure what they put in and got out of technology transfer efforts in 2013 — setting the stage for a thoughtful year-end reflection and review.
A lesson from history
History has a way of repeating itself. In many ways the shift in thinking about the management of university intellectual property assets today mirrors a shift in thinking from 40 years ago about the management of another important university asset: their endowments. In its 1967 annual report, the Ford Foundation made a prescient observation about endowment management: “We have the impression,” the report noted, “that over the long run caution has cost our colleges and universities much more than imprudence or excessive risk taking.”3
A 1969 follow-up report, “Managing Educational Endowments,” encouraged universities to consider a longer-term time horizon for their endowments to support university missions. One of the results of the Foundation’s work was the creation of the Commonfund, a new organization to support universities under this new philosophy. The change in approach has yielded higher returns on university endowments, and enormous benefits to students, faculty, and university communities — and has considerable parallels to technology transfer today.
So in case five is too many, here is one New Year’s resolution for university leaders to consider that may be more impactful over the long-term: instead of considering technology transfer as a cost center, view it as a potential investment. That is the best way to help universities, and their communities, capture more of the long-term benefit from technology transfer in the years and decades ahead.
Sean Pool is a General Partner and Matt Van Itallie is the Managing Partner, of Canterbury Road Partners of Baltimore, MD, a consulting company focused on assisting research universities, government and non-profit economic development organizations, technology companies, inventors, and entrepreneurs in bringing new technologies to market. They can be reached at 443-253-8359 or firstname.lastname@example.org.
1. “The financially sustainable university,” Sterling Partners and Bain & Company, 2012.
2. University Technology Transfer through Entrepreneurship: Faculty and Students in Spinoffs, Kauffman Foundation, August 6, 2012
3. Lawrence Kochard, “Foundation and Endowment Investing: Philosophies and Strategies of Top Investors and Institutions,” 2008.
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