Traditionally, the university mandate covers dual roles in education and research. Research strength distinguishes the great universities from the good. Capitalising on this strength poses challenges that are relatively new to the academic environment. Recently, the recognition of a third pillar that adds focus on external engagement and introduces the idea that universities should be engaged participants in the wider economy by expanding the roles of their education and research functions has stoked the embers of the capitalist flame burning within the research sector.
When it comes to fulfilling the research side of this mandate, dual obligations arise. On the one hand, disseminating research discoveries, is a commitment traditionally considered to be satisfied by journal publication. Leaving aside the barriers to access that many paywalled journals present, as well as the selection criteria, publication review timelines and single discipline constraints of the journal structure (problems in respect of which the funding community appears ready to employ paradigm shifting solutions), there is another fundamental conflict to recognise.
The purpose of publicly funded research is to deliver the benefits of new knowledge to the public and society at large. The publication of a research discovery itself does not achieve that goal. There is no point handing an academic journal to a patient who could benefit from the translation of that discovery into new healthcare treatments, when a costly and lengthy development cycle stands between discovery and application. For the most part, the academic community has approached this problem by attempting to demonstrate its ability to communicate the benefits of research to the public at large, to compliment its academic publication. Whilst researchers cringe at the hyperbole reflected in media headlines reporting on research, this medium for communication marks little more than an attempt to provide fodder to politicians tasked with defending research budgets.
The practical reality is that communicating science to the public at large is important to inspire trust in the public system. However, more robust economic engines are required to make a market in academic research.
When it comes to the third pillar (industry engagement), universities face a choice of options for how best to pursue the goal.
In making this decision, it’s likely that universities who have a bias toward research may take account of factors differently to the way in which those who prioritise education approach the decision. However, in each case, the budgeting and resources made available to education and research well outrank those allocated to support outreach efforts which is consistently recognised as a third priority.
This paper examines traditional and emerging models being used to translate academic research for industry application. As technology transfer and research engagement teams move from the fringe to the core of the academic landscape, it may be possible increase the investment and risk involved in outreach strategy.
Technology Licensing
The idea behind licensing is that a researcher would independently undertake a research program and if a patentable discovery is made, with an applied use in a known industry, then that discovery can be patented, marketed and licensed to industry for a royalty that could be reinvested in research.
There are a few issues that undermine the viability of this pursuit, however it is appealing to university administrators because it is a model that allows maximum separation between researcher and industry research user to be maintained.
Efforts in this field kicked into gear with the US introduction of the Bayh-Dole Act (1980). This legislation represents a tipping point in academic capitalism. It created the framework for the ‘open-for-business’ banner under which universities were to market their patented discoveries to industry for commercial gain.
Whilst some commentators refer to this legislation as a tragedy of anti-commons, others point to practical matters when voicing their criticisms. These include:
- low disclosure rates (which feed the funnel), with impractical disclosures required to be made by academics in respect of matters that due diligence will flag as commercial issues
- limited marketing opportunities confine efforts to personal networks. Attempts at creating ‘discovery supermarkets’ have proven not to be viable (perhaps with the exception of patent trolls).
- optimal funding levels for the risk taking that promotes profitable commercialisation activities are well above the subsistence budgets that universities set for their TTOs. This constraint narrows the focus of the TTO and limits the ability of TTO teams to engage with deep subject matter experts in assessing commercial potential of a disclosed discovery
We produced a patent [to do with diabetic management], which the university did not support financially in any way. The company involved, which was Canadian, suggested that they take all the patent costs and run the patent for us, which was fine. At the end of six months they pulled out; they said they had changed their objectives and were doing something else. As a result, the University of Liverpool was asked to support the patent through its foreign filings and whatever. It refused to do that, and the patent was sold to the USA for a pittance. The USA completed the patent. There are 283 million diabetics in the world. That University of Liverpool test is used pretty much throughout the world, but there is no royalty coming to this country because of the failure to strategise the patent process.
Dr Peter Dean, Founder and Chairman, Cambio Ltd
- inability to fund enforcement action necessary to protect patent rights on behalf of licensees
Whilst the shift instigated by this legislation indicates a more rapid rate of patent diffusion, practical issues impacting the decision to patent, and the ability to market, sell and manage those rights persist.
The reality is that in the US, 84% of TTOs operate at a loss and 15 universities are responsible for 70% of all US patent licensing royalties in 2014. Of that group, each research program was fuelled by a lucky break that resulted in a blockbuster licensing deal. Not only licensing revenue is highly asymmetric but also the highest earners have become a select club with a stable membership. It’s the lucky break that affords the flexibility to take research risk of the scale that can increase the chances of repeating blockbuster success.
The business model is challenging given the size of industry funding, relative to overall funding. Whilst it can be seen to be an increasingly vital source of funding, it has not yet justified the activity levels required to address the fundamental issues with the business model.
Instead, IP supermarkets emerged in an attempt to aggregate technologies that could be licensed to industry. They quickly became a breeding ground for patent trolls. Universities are a particularly vulnerable target. Even without the trolls, the supermarket approach assumes that a discovery can be marketed to a targeted audience, sold, and then plugged in like any other supply chain widget, without any specialist skill or understanding of the underlying research.
Reporting, diligence and commercial and financial structuring improvements are needed in order to better accommodate the characteristics that influence success in this model.
Research spin outs
Increasingly, effort it is being invested in creating structures that support the transition from academic lab to industry participant, using startups and spinouts as vehicles to translate research discoveries.
Formal programs that are successful in this model include:
- The SATT, France which provides a structured program to institute pipeline support to spin good research into startups with teams, funding, training and early adoption opportunities with government locality backing.
- Cicada Innovations, Australia which is a collaboration between 4 Australian universities and operates programs to incubate deep technologies (many of which come from academic pursuits) into successful businesses.
Superstars of STEM are increasingly finding ways to commercialise the outcomes of their research from their independent effort. Examples include:
- Q-Ctrl, an Australian company led by Michael Biercuk, bringing his quantum computing discoveries to market
- Professor Gordon Wallace, from the University of Wollongong, who appears never to be short of a new discovery with commercial potential
- Kari Dalnoki-Veress, from the McMaster University, Canada, whose virtuous cycle from fundamental research in the academic lab, to market participant in the field of squishy physics offers a contemporary example of the opportunity to move between segments of the translational spectrum.
For those academic researchers looking to stay with their research as it is delivered to market, many of the traditional barriers to success in that path have been lifted.
For TTOs supporting this effort, the payoff is not as reliable or fast as the licensing model. The equity return that may be realised represents a risky, longer term investment.
Industry-specific workforce curricula
For universities who see their strength in education, there are increasing opportunities to make industry case studies part of the teaching syllabus. Practera offers a contemporary example of an opportunity to design learning experiences around industry case studies. The outreach opportunity enriches industry participation around fields of fundamental interest and takes the relationship beyond PR and marketing efforts at career open days, to the substance of the business interest. The feedback loop between employer expectations and skills development within the education system narrows. At the same time, the revenue stream supports the commercial return for the university.
Industry-sponsored research
With industry accounting for so little of top line university income streams, it is little wonder that why the focus on building the framework to grow this revenue stream ranks low in the overall priorities of universities considering outreach. This reticence is compounded by the complexity of the challenges that need to be addressed before academic science can truly become an economic engine.
Trends indicate that the tides are changing and the motivation to address the substantive issues, from governance to valuation, exists within academia, industry and the related support services.
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