The federal government funded some $135 billion in research and development (R&D) for all manner of science and technology and is now looking for a way to get a faster return on such investments.
Or at least that was the focus of a congressional Subcommittee on Technology and Innovation hearing this week looking for ways to improve collaboration between commercial concerns and nonprofit organizations, including universities, in addition to promoting the utilization of inventions arising from federally supported research and development.
University research is generally long-term and that "when a university works to patent a discovery, it may be many years before the intellectual property proves to be a marketable success," said subcommittee Chairman Ben Quayle (R-AZ).
"The transfer of knowledge from universities into the marketplace can have profound economic and societal impacts, so we are always looking for more ways to encourage this process," said the Subcommittee's Vice Chairman, Rep. Judy Biggert (R-IL). The guiding legislation regarding federally-backed R&D is the 1980 Bayh-Dole Act which supports universities and small businesses in the commercialization of their inventions.
"I am convinced that there are a number of ways that we can strengthen and improve technology transfer in this country. There are far too many good ideas out there in our universities - good ideas that have been developed through Federal taxpayer support - that languish. As we continue to look for ways to strengthen our economy and secure our global competitiveness, I think it would be wise to focus on technology transfer," said Donna Edwards (D-MD).
As an example of new industries that have been created in part by Bayh-Dole, Dr. Todd Sherer, President of the Association of University Technology Managers highlighted biotechnology. "The bioscience sector represents an employment impact of 8 million jobs, and 76% of biotech companies have a license from a university."
"Without the local pride of ownership and control created by the Act, many of these discoveries would still be languishing on the shelf and no revenues would be returned to fund even more research," Sherer stated.
While some of the hearing focused on the Bayh-Dole Act, other contributors focused on other aspects of technology transfer, including proof of concept research, entrepreneurial education programs at universities, and facilitating greater cooperation between university researchers and industry. Subcommittee Democrats also discussed the lack of Federal resources for commercializing technologies funded by Federal research agencies, according to a statement.
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Some of the other interesting take-ways from the hearing:
From Robert Rosenbaum, President & Executive Director, Maryland Technology Development Corporation:
- Programs like the [National Science Foundation's] Partnerships for Innovation should be created at other agencies to explore new models of technology transfer and commercialization. NSF's PFI was used to fund two highly successful programs in Maryland, Activate and Innovate. These programs were an experiment in entrepreneurship and tech transfer targeted at women and post-doctoral fellows respectively. Deemed very successful tech transfer programs, they also helped to foster relationships between universities and industry.
- University policy changes regarding tenure and sabbaticals could also have an impact on commercialization efforts. Currently, and simplistically, success, defined as tenure, for a university researcher is accomplished in part by the publication of a paper, the filing of a patent, or a speaking engagement at a conference. Nowhere in that success formula is commercialization.
- One way to force companies to interact with industry is to change the dynamic with respect to who is funding university research. For example, providing industry tax credits for sponsoring research in universities would incentivize interaction. The tax credits could be paid for by reallocating research funds in the federal research budget. Moreover, the tax credits, which would only be a percentage of the industry-funded research, would be leveraged by industry funding and ultimately could lead to greater university research funding. A similar model could be used as an incentive for companies licensing technology - i.e., tax credits for licensing fees, much of which is returned to the university to support research in accordance with Bayh-Dole. With universities and industry working closely, more opportunities for collaboration, licensing, and commercialization would result.
- Industry often claims that it is difficult to negotiate license agreements with universities. A guidance or effort in conjunction with the Association for University Technology Managers (AUTM) and the Licensing Executives Society (LES) for standardizing licensing terms for federally funded inventions might help to address this issue and facilitate the licensing and commercialization process. There are already some efforts to accomplish licensing standardization at the University of North Carolina and at NIH. Expanding these efforts would be beneficial.
Ken Nisbet, executive director of technology transfer at the University of Michigan:
- Tech transfer is hard work requiring professionals with an unusual combination of skills and qualifications. Each year our faculty report to our office more than 300 new discoveries that form a diverse portfolio of technologies and market applications. We enter into over 100 different agreements with our industry partners annually and spin out an average of one new start-up every five weeks, most of which stay in Michigan.
- We have expanded the funding resources available for our early-stage technologies and new start-up opportunities. Our University has several translational funds that allow technical validation for emerging discoveries. One example is the Coulter Translational Fund for promising biomedical projects, created via a matched endowment from the Coulter Foundation. Complementing our translational funds, the University is reinvesting tech transfer revenues into an internal "Gap" fund that is generously matched with funds from the state of Michigan to address market validation and commercial-readiness issues. And recently, we established a program called MINTS (Michigan Invests in New Technology Start-ups) in which the University, alongside a qualified venture firm, is investing endowment funds in promising U-M start-ups.
- We have worked hard to establish partnerships for other funding resources, such as a Pre-Seed Fund administered by Ann Arbor SPARK, our local economic development partner. Our State has helped to broaden our early stage venture resources with Venture Michigan, a fund of funds and other programs administered by another partner, the Michigan Venture Capital Association. We have established effective relationships with local and national venture funding partners, understanding their investment needs and resources and providing them tailored funding opportunities to make a "yes" more probable.
Catherine Innes, the Director of the Office of Technology Development at University of North Carolina (UNC) at Chapel Hill testified about how universities can best prioritize limited resources and assist more companies in furthering a technology and becoming sustainable. Ms. Innes said that UNC "focused on finding ways to make the license process faster, easier and more transparent so that the money a company did have could go toward getting the company up and running."
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