Where Einstein Meets Edison

Evolving Strategies for Commercialization of University Research

Evolving Strategies for Commercialization of University Research

Dec 1, 2010

Universities: a tradition of great research and innovation

University research and innovation is a central component of technological innovation and entrepreneurship. From penicillin to operating systems, university research creates platform technologies that fundamentally change human life. Google, which began as a graduate research project at Stanford University, is an illustrious example of university research that became one of today’s greatest global corporations. While Google may be an anomaly of size and success, the translation from research to business is not uncommon. At MIT, for example, research from the lab of Institute Professor Robert Langer has been commercialized in over 200 companies1. Universities provide a dense population of enthusiastic and energetic talent, which, not surprisingly, yields innumerable discoveries with viable commercial potential. While universities have embraced the idea of capitalizing on this potential for several decades, academia has only recently taken an active role in facilitating the translation of technology into business. Formerly, research was perceived as the pursuit of fundamental scientific truth and commercialization was not perceived to be an academic goal. This trend has generated an emphasis shift in research and funding from the pursuit of fundamental truth to the pursuit of practical applicability. A famous example is the licensing of the Cohen-Boyer patents by Stanford University. Stanley Cohen and Herbert Boyer discovered the recombinant DNA technique, which is widely applicable in fundamental scientific research and created the genetic engineering revolution. Stanford University decided to license the technology and the commercialization of the technology spawned the multi-billion dollar biotechnology industry, which benefited basic and applied research at Stanford University and elsewhere. Thus, fostering practical technology can create financial benefit and generate prestige through top tier commercial association.     

Funding the commercialization

While the idea of developing and commercializing innovative university technologies is of clear benefit to academic institutions and corporations alike, academic research is funded primarily through government (NIH, NSF, DOE, DARPA) and private foundation (HHMI, Searle Foundation, Sloan Foundation) grants. This funding is usually for advancing science and rarely for commercialization, with the exception of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants from the NIH and private foundations such as the Gates Foundation.  Furthermore, these specialized grants are generally awarded in small amounts, which fall far short of the substantial cost to build a commercial enterprise. This is particularly hobbling in an industry like biotechnology where the road to market can cost $100 to $800 million per drug candidate. Clearly, public funding cannot support these costs and an industry partner is needed. These barriers to commercialization have led universities to develop a number of models to support technology transfer and commercialization.

Models of university research commercialization

Given the high cost of some forms of commercialization, a general strategy is for universities to fund discovery stage academic research and then seek industrial partnerships to continue development of potential commercial technology. In this model basic scientific discoveries or innovative engineering technologies with translational potential are identified and out-licensed to industry for further development and testing.

Industry-sponsorship programs have proven remarkably successful in facilitating commercialization of university research. Indeed, corporations such as Ford, Motorola, Microsoft, Intel, Novartis, Roche and others have traditionally sponsored commercially-viable research at US research universities. In a related model, industries establish their own basic scientific and technological research centers close to major research universities, drawing on the student talent pool and faculty expertise. Examples include the former Bell Labs, Microsoft Research and IBM Research, among others.    

Industry- or privately-funded centers are emerging as yet another model to foster technological innovation at research universities. The Deshpande Center at MIT is a prime example. Some universities have also established their own angel investment/venture investment funds to invest in the commercial potential of their most groundbreaking discoveries. Several successful examples such as the The von Liebig Center at UCSD provide both funding and mentoring services to start-ups led by their students and faculty. This center has funded several emerging companies based on internal expertise in life sciences, internet and software, and materials sciences. In the same vein, the New York University recently initiated a $20 million fund to invest in commercialization of their research technology2. There are numerous examples of these funds both at private research and state universities4. Technology transfer offices at most major research universities have been actively pursuing commercialization of university technology in recent years. Given this strong trend, it is conceivable that most major private and state research universities will be able to offer such funds in the coming years.

International collaborations are likely to enhance global innovation   

MIT has pioneered the approach of international research collaborations with the Singapore-MIT Alliance. Several other large universities have followed suit5. This trend towards global research collaborations mirrors the increasingly international nature of business and will fundamentally alter the way science and engineering research is performed in universities. The present generation of students at major universities will find this atmosphere encouraging for international partnerships and business growth.

The path ahead

Now that academic science has global footprints, it will foster further creativity in technological, administrative and governmental efforts to facilitate this endeavor. As a society we face myriad significant challenges that may be met with technology and innovation. Providing effective, affordable and readily available healthcare, addressing climate change and developing green technologies are just a few of the problems that will require the collective efforts of major research universities collaborating on projects of great complexity. Universities will have to create new approaches to meet the political, legal and organizational challenges for both the scientific/technological research as well as commercialization of such research. We at MITER will closely follow how the evolution of this challenge and encourage our audience to contribute their own experiences to grow our understanding of how research innovation impacts the world. We believe this understanding will allow us to look forward to a great future.