A common assumption is that the majority of new inventions brought to market are the product of university research. In reality, though, university returns from patents and licensing are meager, and the number of patents and startups universities produce is a tiny fraction of the overall market. Within most universities and technology transfer centers, there’s an uphill battle being waged to bring new ideas to market but despite these institutions’ best efforts, challenges mean willing investors continue to be left hanging.
It’s a huge issue, not only for universities but for all of society, when groundbreaking, invaluable research can’t be actioned to solve the world’s problems. Here, we discuss how modest universities’ contribution is in terms of patents and startups; why academicians are reluctant to engage in the technology transfer process; and how some universities are now managing to make inroads into more efficient technology transfer.
Few patents and startups are created by universities
It’s forgivable to be under the impression that universities are where most research begins to be turned into the commercial solutions that improve our lives and help the environment and economy. But such success stories are actually as rare as hens’ teeth.
At best, discoveries made from university laboratory research usually take years to reach the market, but usually they never even get that far. The National Science Board said that of 304,126 patents granted in 2016, only 6,639 — 2% — were for academic institutions. It also revealed $75.3 billion in federal funding and funds from other sources was spent annually on research — but not commercially-minded research — the type of research that builds fundamental knowledge rather than unearthing actual commercial applications.
Academician Reluctance Toward Technology Transfer
Association of University Technology Managers (AUTM) members oversee what is known as technology transfer — the process by which new inventions and other innovations created in those institutions’ labs are turned into products and commercialized. Moving research from a university lab to the market via a tech transfer center is an intensive, expensive task that requires extra dedication and a lot of time; it’s this stage where holdups happen, and research becomes siloed. Technology transfer is by no means a walk in the park.
The tech transfer process is daunting, and despite their best efforts, hard-working, dedicated personnel struggle to keep the process moving forward. Some aspects of tech transfer involves:
- Working with attorneys to secure patent and other intellectual property rights,
- Assessing the commercial potential of new inventions,
- Marketing available technologies to potential licensees and partners,
- Educating researchers on commercialization principles and strategies,
- Assisting with faculty start-up creation and development,
- Securing funding for early-stage research and start-ups,
- Negotiating partnerships and license agreements,
- Organizing business plans.
Due in part to the long, expensive process that can seem insurmountable, academicians are traditionally not incentivized — or simply don’t want to know how — to go beyond the research and work with industrial backers to see critical solutions hit the market. It’s a process that can take up to five years, so rather than take such a route, promotion and tenure from bringing research money in and having papers published typically becomes more of a focus for academicians.
Researchers justifiably concentrate on conducting fundamental research rather than following through with the complex, time consuming commercialization process for new inventions. Most researchers get as far as reaching their academic conclusion for a particular study, but opt not to convert their findings into a polished, convenient package to present to investors. Patents’ revenue drawn in, and commercial startups that happen as a result of their research are not usually a source of motivation.
The great shame is that when the process can be completed, the commercialization of technology benefits all of society. Tech transfer is a worthy cause that leads to advancement in a host of fields and applications, such as new life-saving drugs and medical devices, alternative energy solutions, computer hardware and software, better transportation, vaccines, environmental solutions, agricultural innovations, and so many more.
Addressing the Siloing of Ideas
In the face of steep challenges, the siloing of knowledge and technology is slowly being addressed. With considerable effort and dedication, universities are starting to be able to prove that when successful tech transfer does happen, it draws revenues that can be poured into further research. Academicians gain recognition for themselves and the school; and grant funding and faculty recruitment is boosted. The process is still so slow and expensive at most universities, but some are leading the way by upgrading their technology transfer centers and introducing significant venture funds and other measures.
Johns Hopkins University gets the most research funding of all US universities but even so, it was forced to address untapped commercial potential in recent years. In 2014, the University’s Innovation Report revealed $1.5 billion in funding had only generated $16 million in licensing fees. The subsequent creation of Johns Hopkins Technology Ventures aimed to address such poor returns, and better promote scientific entrepreneurship.
Within three years, the technology transfer center ranked first for licenses, and second in the US for Reports of Inventions — the first step on the path to commercialization. The center funds translational activity via seed grants, an externally managed investment fund for emerging startups, and a grant program to fuel technology development.
Other leading universities have also taken steps to improve transfer rates:
- Stanford recently restructured its Office of Technology Licensing, to “better meet the needs of the increasingly complex research, technology development and commercialization relationships that are required to maintain Stanford’s top tier status in innovation.”
- Purdue Office of Technology Commercialization worked to raise its number of patent applications by 42% between 2015 and 2020.
Success for these few institutions is a step in the right direction and shows technology transfer can be improved and is most certainly worth the effort. But at the moment, big-hitting programs still account for most of the licensing revenue figures. The question is how to ensure universities, and academicians, get their fair share of the proceeds after their invention hits the market, and how to make that happen faster.
Encouraging Academicians to Embrace Entrepreneurship
To be able to play a more active role in solving global problems, all research institutions need to attempt to follow the lead of top universities that have already recognized the benefits of commercializing inventions and scientific breakthroughs. This equates to providing space for entrepreneurs to work, translational funding for projects, support for hard-working tech transfer staff, and extra resources for mentorship and corporate partnerships.
Academicians must be given the confidence, encouragement, and incentive — the “green light” — to embrace entrepreneurship where once it was perhaps deemed unscholarly. The business community stands ready to bring academic breakthroughs to commercial fruition, which benefits all society, and well-funded universities have a responsibility to speed the process of getting groundbreaking discoveries into the open.
Written by Craig Farmer, Pure Green Cement, L3C