10 Observations on the Success and Failings of University Tech Transfer

Universities around the world are being encouraged to find ways of commercialising their research, the assumption being that this always a good thing.  However not all university tech transfer offices are able to operate at a profit, and so questions need to be asked about whether all universities should attempt commercialisation.  The following points are from the report ‘University Start-Ups: Critical for Improving Technology Transfer’ which concerns university tech transfer in the US.

1.  All 206 US universities which carry out high levels of research activity have technology transfer offices (TTOs).  However TTOs are costly and in 2012 84% of them did not make enough money to cover staff wages and patents costs.

2.  There is great asymmetry in the distribution of licencing income for universities. The top 5% took 50% of the licensing income and the top 10% took nearly three-quarters.  This asymmetry is unchanging with only 37 universities able to reach the top 20 of licensing revenue in the last decade.

3.  TTOs often look to produce blockbuster patents, such as the gene splicing Cohen-Boyer patent that yielded $255 million for Stanford and UCSF.  However in reality such patents are rare.

4.  Universities are therefore increasingly turning to the ‘start-up’ model as a way of commercialising research.  TTOs can afford to set up start-ups with help from government and investors.  Start-ups will licence high-risk low-fee patents and provide an environment for the technology to be developed with the help of university scientists.

5.  Setting up start-ups is seen by the government as fostering entrepreneurship and attracting high-tech industry to the university’s region.

6.  For TTOs start-ups allow managing of financial risk, diversification and active management of the investment portfolio. Start-ups allow better integration of the university into the market system and more proactive partnering with the private sector.

7.  The government should provide greater experimental use exemptions for start-ups.

8.  Recognising the present asymmetry of success in commercialising research the government should seek to distribute its funding more equitably.

9.  The much-talked about ‘innovation deficit’ could be met with more imaginative ways of harnessing the new knowledge and know-how which is being produced (rather than increased government funding for research).  Start-ups may assist this.

10.  Start-ups may also be an environment which more effectively converts intellectual value to economic value (compared to university research or licencing).

The report itself can be accessed here.

You may also wish to see related articles Problems of Patenting and Commercialising University Research and Patent Advice for Tech Transfer Offices.