Integrating industry in the academic research cycle

Coalfacer
Coalfacer
Aug 22, 2017 · 3 min read

Over the last 5 years, universities and research institutes have placed increasing emphasis on the role of industry in the academic ecosystem. It’s territory which is a popular target for public policy review, a soft target for research budget analysts and a field hamstrung with a history of conflicts of interest and hot-potato policy making that it gives participants in the environment cause for concern.

However, resource constraints motivate participants to give it another go.

Standford’s Office of Technology Licensing (SOTL) reports an increase in licences to startups to over 20% in 2014 & 2015. Most recognisable on its list of success stories in this field is Google.

SOTL recently published this guide to working with university discoveries. http://otl.stanford.edu/documents/OTLstartupguide.pdf?platform=hootsuite

SOTL describes the process of engaging with industry as an innovation cycle, illustrated as follows:

Is that a cycle?

It’s certainly a top-level, theoretical representation of income and expenses. It shows how royalty revenue is generated to support research funding. But it isn’t a cycle. We’ll leave the economics around when and how royalties are generated for another day.

It’s linear. The start/finish line is marked in red.

Typically:

  • the researcher phases out of the production line when the discovery is disclosed
  • business development teams from the university’s tech transfer team step in. They analyse the discovery, the potential applications and the relevant markets and decide whether finite resources should be allocated to protecting the discovery and marketing it to potential licensees. The window of opportunity is often tight, given that the researcher’s objective is likely to have the discovery published in an academic journal. Marketing opportunities, pre-patent, are limited.
  • Once patented, shelf-life to marketing and maintenance is taxing on TTO decisions. Analysis of patent portfolios of a leading UK university indicates a loss rate of approximately 10% each year.
  • Once licensed, royalty structures need to reflect the competing interest between the university (which wants to record royalty income quickly) and the development cycle which needs to justify the cost of paying those royalties. It’s tricky to maintain a strong negotiating position when the circumstances don’t afford much flexibility.

This is not a virtuous cycle. It’s a production line.

Is there a better way to design the cycle so that it is virtuous, for the researcher, the BD community supporting them and the industry participants who take the research through the development cycle, to market? Could it allow risk participation for the broader economic market?

What if:

  • the cycle incorporated assessment at the research stage?
  • the BD teams supported researchers in identifying market trends, participants and resources before the research design were finalised?
  • resources, including funding, but also insights, data, facilities and interests from outside the research community were reflected in the research design (subject to robust research governance protocols)?

There are a range of transaction structures that could be deployed to produce this cycle. Tech transfer teams are small, relative to the size of the research community they support. Getting across the research is a significant challenge in itself. Transaction structuring is not a field in which the pace of development in the research and technology markets is reflected. Maybe it’s time to put some focus on the wider options, beyond licensing.

We’re expanding our beta in October 2017. We’d love to hear from TTOs and Research Engagement teams at universities and research institutes in Australia, New Zealand, Germany, Singapore, UK and USA who might be open to testing our transaction structuring tools. We think they’re going to help accelerate research engagement and adoption across segments of industry that typically do not see academic collaboration as a priority. We’d love to hear from you.

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Coalfacer

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Coalfacer

create, fund and translate academic research • academic engagement at the coalface of industry

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