Report

Commercializing University Innovations: A Better Way

Robert E. Litan, Lesa Mitchell and E.J. Reedy

Executive Summary

With the passage of the Bayh-Dole Act of 1980, the federal government explicitly endorsed the transfer of exclusive control over government-funded inventions to universities and businesses operating with federal contracts. While this legislation was intended to accelerate further development and commercialization of the ideas and inventions developed under federal contracts, the government did not provide any strategy, process, tools, or resources to shepherd innovations from the halls of academia into the commercial market. And more than twenty-five years later, it is clear that few universities have established an overall strategy to foster innovation, commercialization, and spillovers. Multiple pathways for university innovation exist and can be codified to provide broader access to innovation, allow a greater volume of deal flow, support standardization, and decrease the redundancy of innovation and the cycle time for commercialization. Technology Transfer Offices (TTOs) were envisioned as gateways to facilitate the flow of innovation but have instead become gatekeepers that in many cases constrain the flow of inventions and frustrate faculty, entrepreneurs, and industry. The proposed changes focus on creating incentives that will maximize social benefit from the existing investments being made in R&D and commercialization on university campuses.

Introduction

Today we take for granted the rapid pace of technological progress that has carried many national economies forward for the past 200 years. Continued innovation that has diffused through the marketplace has made this progress possible. In turn, entrepreneurs have been instrumental in commercializing innovations, especially the radical or breakthrough innovations—such as the automobile, airplane, air conditioner, personal computer, among others—that have transformed economies and societies in fundamental ways that the more typical incremental innovations associated with large corporate enterprises have not (Baumol 2002).

As technologies have grown more sophisticated and emerging industries have become more high-tech, universities have become more important players in the processes of invention, innovation, and commercialization. We have written this paper largely because we anticipate universities playing an even more important role in the innovation process in the future.

To be sure, bringing innovations to market has not been the main historical role of university-based researchers. Instead, university researchers quite appropriately concentrate on basic science. But the ultimate aim of scientific research, after all, is to improve the human condition and so aiding the transfer and commercialization of discoveries serves the interests of the inventor and society. “Since the Industrial Revolution, the growth of economies around the world has been driven largely by the pursuit of scientific understanding, the application of engineering solutions, and continual technological innovation” (National Academy of Sciences and National Academy of Engineering 2006). Ideally, university structures should support all aspects of this process, from invention to innovation, as well as commercialization.

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