Based on Shiri M. Breznitz

Source: Shiri M. Breznitz. 2014. The Fountain of Knowledge. Stanford University Press (Ch. 2+7).

University policy

While it is evident that universities have the ability to disseminate academic ideas and commercialize technology, the particular process and its timing make a difference in the outcome of these changes. Many universities need to improve their technology-transfer organization and policy, but change cannot come simply from copying the Stanford or MIT model. Each university is unique in its ability to commercialize technology. Any model that a university chooses to follow needs to fit that university’s characteristics, regional environment, culture, history, and the resources available for commercialization. A liberal arts college is not likely to spin out biotechnology firms, nor are teaching institutes that do not focus on research likely to invent the next Internet. That said, universities should have a clear IP policy.

Second, changes to the university technology-transfer policy and organization need to take place in collaboration with other regional players, including industry and regional agencies. Cooperation with other regional players places any policy or organizational change in a regional context. This context provides the university with guidance to what technology commercialization mechanisms will work best in the region to achieve the ultimate economic development impact. To properly evaluate university actions, we must consider industry perspectives in these efforts. Thus, we must also look at industry knowledge of and participation in universities’ activities directed at technology transfer and commercialization. Universities can create programs to support the transfer of technologies to the private market; however, those programs will not generate the desired impact unless industry finds them useful and accessible.

Third, technology commercialization needs to become part of what universities define as research excellence and not solely as a means to make a profit. If technology commercialization is to be sustainable, it needs to become part of a faculty promotion and tenure process. Junior faculty in particular are wary of engaging in risky activity that may cost them their position.

Government policy

Canada and Ontario do not have a policy regarding IP generated from publicly funded research. Ontario universities vary in their approach to IP. Though most allow faculty the option of exerting a right of ownership over IP they create. As the Expert Panel report recommends:

All commercialization entities within research organizations that receive public funds should have a clearly defined mandate regarding their roles and responsibilities and ensure that there is a plan to address any issues of institutional alignment, and capacity to fulfill this mandate. The ministries should create a mechanism for commercialization entities to articulate perceived gaps inhibiting these outcomes.

That said, universities should not be measured on their return in currency alone. The experience of universities such as MIT and Stanford, which played a central role in the success of their respective regions, teaches us that universities’ return from patenting and licensing does not even come close to covering the expenses of basic research. Universities are generally active in their communities. They provide policy and economic support that extend from other activities that are not related to technology transfer. Trying to impose market values on universities’ regional impact is difficult to impossible.

The innovation ecosystem

Universities do not operate in a vacuum. External university factors have a direct impact on the ability of universities to commercialize technology. Moreover, any attempts to improve or change technology commercialization at universities need to take the university’s environment and region into account. Two external factors affect the ability of a university to commercialize technology: history and environment. Historical factors, based on national, international, and regional policies such as intellectual property rights laws and tax incentives, play an important role in the ability of universities to succeed in their technology transfer and university-industry relationships (Lawton Smith and Ho 2006; Mowery et al. 1999; Pike 2002; Rahm, Kirkland, and Bozeman 2000; O’Shea et al. 2005). Environmental factors relate to the relationships among institutions on national and regional levels. The ability of a group of local institutions to transfer knowledge and hence to affect the ability of a locality to innovate depends on their number, strength, and collaboration efforts. Sharing of information and collaboration among institutions drives innovation (Nelson 1993).

Technology commercialization process at universities

Universities are intricate and varying institutions. Hence, internal factors such as institutional policy, culture, and organization influence their ability to disseminate academic ideas to the private market. Although we would like to think that all universities are the same, their differences are broader than the topics they teach or the faculty they employ. Universities have different histories, cultures, and structures that affect the way they interact with the region in which the university resides, the way they view technology commercialization, and local economic development.

Below is a list of best practices for technology transfer at universities:

The technology transfer offices (TTOs) in universities have four main purposes:

  1. evaluate inventions and determine whether they are patentable
  2. patent the inventions
  3. license the technology
  4. in some cases, to assist in the creation of spinout companies.

The technology transfer office’s responsibilities are quite loose and open to interpretation, however, and they differ significantly between universities. Some universities will only patent a technology that has market demand to which it can be licensed. For many the spinout of companies is not a priority; their goal is to garner income from licensing their patents. Furthermore, in many cases the professionalism and actions of the technology transfer office affect the likelihood of being able to license a technology.

The level of resources associated with the technology transfer office impacts its commercialization ability. Several studies showed that technology transfer offices that have personnel with higher levels of education and business experience tend to have better understanding of the technology and negotiation processes with firms. Understanding business and product development allows for more flexibility and trust and promotes the willingness of inventors and investors to work with that TTO (Lockett and Wright 2005; Shane 2004; O'Shea et al. 2005). Since university and industry have different business perspectives, highly educated technology transfer office employees who have knowledge of both the technical and business jargon reassure both inventors and investors that their product is getting the best available treatment.

Moreover, the professionalism of the TTO impacts faculty disclosure rates and commercialization interests. A study by Owen-Smith and Powell (2001) showed that larger and more experienced TTOs are able to provide personal and professional care when working on faculty inventions, thus encouraging faculty to disclose and patent technologies. By 2004, Yale University’s technology transfer office employed eighteen people, each with five to seven years of industry experience. At the same time, Cambridge Enterprise (Cambridge’s TTO) had eighteen employees, fifteen of whom had no industry experience. The differences in these two offices in terms of employee experience surfaced in my interviews, which revealed constant complaints about Cambridge Enterprise’s lack of business understanding. Hence, the business experience and knowledge base of TTO employees have more weight than the sheer number of TTOs employees. What is known today as “The Silicon Fen” is based on many technologies that came out of the University of Cambridge’s TTOs, which for many years operated with only two employees.

Both Clarysse et al. (2005) as well as Locket and Wright (2005) found that the business development capabilities of the technology transfer office positively influence startup formation. The variables they found to be of the greatest importance were the marketing, technological, and negotiating skills of the technology transfer office staff, the establishment of a clear administrative process for spinout companies, a clear due diligence process, and availability of competent staff to administer these processes (Lockett and Wright 2005; Clarysse B. et al. 2005).

Another factor that relates to the availability of resources is the use of outside lawyers. Siegel et al. (2003) found that spending more on outside lawyers reduces the number of licensing agreements but increases revenues. The authors hypothesize that hiring external lawyers allows TTOs staff to spend more time on connecting the invention to the right firm, which results in a successful license and higher revenues. While examining the TTOs staff, Siegel et al. note that when TTOs officers receive incentives (compensations) there will be higher licensing activity.

Importantly, technology transfer offices, much like universities themselves, differ in their compensation abilities. For example, technology transfer offices vary in their ability to offer attractive wages and benefit packages to attract high-level employees, who are highly compensated in the private sector. Accordingly, many technology transfer offices differ by the education and experience of their employees. In many, industry experience and a doctorate in the sciences is a necessity. In order to solve the issues of staff compensation, some public universities’ technology transfer offices became private organizations that are fully owned by the university. For example, Isis at the University of Oxford, United Kingdom, and Yissum at the Hebrew University, Israel, are private organizations.

The size as well as the age of the technology transfer office has also been found to affect university technology transfer (Carlsson and Fridh 2002, p. 230). According to Chapple et al. (2005), U.K. technology transfer offices show low levels of absolute efficiency. Their study found that older offices appear to be less efficient by the number of licenses compared with research income and invention disclosure. This may suggest that older TTOs have not changed or adapted to the “third role” of universities. Moreover, larger universities are more general and include many fields of technologies, and we know from other studies (Owen Smith and Powell 2001) that technology transfer in the life sciences is very different than in the physical sciences. This finding, according to the authors, suggests the possible need to invest in smaller, specialized offices instead of the general growth of the office (Chapple et al. 2005; Owen-Smith and Powell 2001).

A recent study by O’Shea et al.(2005) found that the historical background and past technology transfer success of each university is related to future capabilities and options for the university with regard to spinout capability. When a technology transfer office has successfully seen an invention go through the commercialization process, and sees returns in the form of royalties, the office is strengthened and motivated to continue with the commercialization process. Yale University has seen success in technology commercialization via its patenting of Zerit™