From Science to Business – How Firms Create Value by Partnering with Universities

In today’s “knowledge-based” society, it is becoming increasingly imperative for companies to “mine” knowledge and technology generated by universities. Why? Because the outcome of such industry-university collaborations help companies create new activities and jobs.

Companies tap into the new knowledge and technology generated by universities in various ways, from hiring graduates to giving endowments and commissioning contract research. Only a small fraction of universities in Europe and the US carry out collaborative research with companies. According to a AUTM report (www.autm.org), in the most active cases, the amount funded by the private sector represents only about 6% of the total research budget of these universities: the lion’s share of research funding comes from the public sector, with a very small number of universities capturing the bulk of private sector funding.

When it comes to patent-based licensing and/or selling intellectual property (IP), most universities do not generate enough income to cover the expenses of their technology licensing office. A noted exception is Northwestern University, which received more than $480 million in licensing income and royalties in 2008 from Pfizer.

Industry and academia must team up to move our world towards a more sustainable future.

The third vehicle for commercialization is the creation of start ups. This is a complex path and universities usually do not have the business sense required to follow it, as they rightly concentrate on excellence in teaching. Typically, they work with external partners for this task. The pharmaceuticals and biotech sectors are examples of companies that engage in such science-to-business process.

Partnerships between companies and universities are particularly critical as we face mounting issues around energy, water, food and climate, as well as demographics and healthcare. Never before have non-business issues been so relevant to business.

Industry and academia must team up to move our world towards a more sustainable future. Only China, Germany and Japan have made substantial commitments in this area. And never before have non-technical innovations been so critical to business success – innovations such as novel business models or managerial practices that are often enabled by information and communication technologies.

The changing landscape for universities and industry

Universities worldwide are confronted with diminishing growth in public funding (e.g. Japan is decreasing by 1% per year), and they are being forced to adapt by raising funds from private sources. But, as the above figures indicate, they probably can’t count on a commercialization bonanza in the foreseeable future. However, they must take steps to make the difficult transition by changing their academic mindsets and moving towards becoming more firm friendly and solutions-oriented.

Industry is also changing its approach to innovation. With ever-increasing pressure to focus internal R&D activities on short-term payoffs, many companies are beginning to pursue their long-term strategies through collaborations with universities. As a result, new partnerships are emerging that will ultimately change the roles of both.

A growing number of companies are thus making changes in the ways they do their current business or plan their business development activities, as a result of inputs from universities. Following are examples of some of the activities that companies are pursuing:

Match your objectives with the appropriate institution

Once a company has defined its business development objectives, it must identify those institutions with which it should engage. It is important for firms to make sure China and India are on their radar screens, as universities in these countries are emerging as strong contributors. Firms must have the wisdom to take advantage of what these, and other universities, have to offer.

Leverage graduate students

Every year, the 40-staff start-up, HiFiCom (disguised name) in Copenhagen, welcomes 20 graduate students from a local engineering school. Managers from the company also do sessions for the Master’s course, which enables them to spot good candidates to work with the company on their Master’s thesis. A few of these students are hired, and as a result of the constant flow of fresh talent and their ideas for new commercial offerings, the company has been growing steadily.

Participate in collaborative research

HP has more than 100 collaborations with universities worldwide. Many of these are with leading Chinese universities, such as the U. of Beijing and Tsinghua. Collaborative research is often focused on difficult issues, often related to long-term research. Even though the projects are often peripheral to HP’s business, they frequently result in the modification of the business development plans of specific business units.

Buy licence or IP

NovImmune, a Geneva-based company active in the area of therapeutic monoclonal antibodies to treat patients suffering from immune-related disorders, was founded in 1998 after obtaining a licence from the University of Geneva. With 70 staff, it is now profitable and relies on an array of collaborations for innovative discoveries to further develop its core activity of producing therapeutic monoclonal antibodies.

Create spin out companies

The University of Cambridge, which had five start-ups in 2009, has had several successful spin outs, including Metalysis, which has commercialized a technological process to produce high-value, specialist metals and alloys used in the electronics, medical, marine, aerospace, chemical and defense sectors. The technology facilitates cheaper production with a significantly lower environmental footprint.

Beyond the financial returns, there are may other benefits of knowledge transfer for universities, businesses and society as a whole. For example, collaboration will help universities focus their research on the wider needs of society and industry. And it has socio-economic impacts in the form of new jobs, new companies and new products such as pharmaceuticals. Our future largely depends on it!

By Georges Haour & Laurent Miéville

About the authors

Dr. Georges Haour is Professor of Technology & Innovation Management, at IMD, Lausanne, Switzerland. He also acts as an adviser to firms and organizations in his area of value-creation through effective management of the innovation process, as well as commercialization of technology.

.
.
Dr Laurent Miéville is Head of University of Geneva’s tech. Transfer. He has been deeply involved in the technology transfer scene and founded Unitec, the Technology Transfer Office of the University of Geneva in 1998. He is also one of the first technology transfer professionals to be certified at the international level as “Certified Licensing Professional”.

The publication date of their new book From Science to Business: How Firms Create Value by Partnering with Universities is October 2010. It looks at the three main transfer vehicles for companies to benefit from university research: collaborative research, licensing and spin out companies. See the website of the book:  www.sciencetobusiness.ch.

  • Yahir Delzo

    Good synthesis of what is being experienced intensely in universities. Recently, in Latin America is becoming more common the subject of “technology transfer” or “techonology comercialization”.
    For example, in Peru, Universidad Peruana Cayetano Heredia (number one in Research) has created, few months ago a private firm to commercialize the technology assets of the university community, but the ignorance of the ways to make marketing are still unknown; both, by universities themselves and by state agencies.

  • http://uk.linkedin.com/in/zulfiqardeo Zulfiqar Deo

    I agree that there is significant potential for universities and companies to work together to innovate, especially in an age when margins are under pressure and stand alone R&D is expensive.

    However, we need to be careful not to narrow our focus on how science can be commercialised. At times it is how well the technology is streamlined into the strategy of the company which adds the value and this seems to be an ares that needs greater attention.

  • http://www.cocreative.co.uk Jacqui

    While I applaud the connecting between Universities and Commerce, let’s get things into proper perspective!

    Why do we constantly assume that all the innovative thinking is only happening in Universities? Many small businesses are equally as Innovative, but lack the funding that Universities get both for R&D and for development. For small businessess, who need to work lean and fast, working with Universities can add a very large admin overhead; enough to make working together impossibly expensive (even with the grants available). I’d like to see more support for SMEs in developing Innovation and less assumption that Universities are the only source of knowledge.

  • http://www.innovationparadox.com Haour Georges

    we never assumed that universities have the monoploly of (innovative) thinking….
    what we say is that firms and universities have a lot of work to do, in order to foster effective partnershipos that will creat new opportunities and jobs for our kids
    Georges Haour

  • Yahir Delzo

    I agree with Haour, we don´t assume that universities or technical institutes have “monopoly of thinking”.
    Ideas,innovation, and thinking are in every place and time that we want.

  • julye diaz

    I am a Technology Manager since 1998 and I’ve worked mainly for National University of Mexico (UNAM) in technology and knowledge transfer to private industry.
    For us it’s being very difficult to transfer a whole technology package because for the industry, university times are really long for their short-term needs.
    We tried to shorter our research times, but as you said through the article, senior researchers and professors are there for teaching, not for selling products…
    Anyway, I think the main challenge is to make researchers and professors more conscious about University funding needs and industry fast track result needs, but how to convince them? that is the question…

  • http://www.innovationparadox.com HAOUR

    Time horizons of university reserachers and firms are indeed different, so firms must be aware of this; the real problem is that university research is un predictible: its progress depends upon the motivation of graduate students & the like. universities must continue to concentrate on excellence in education and research. selling research to firms is an important by-product, which generates small, but welcomed, additional money and provides an educational window on what “the real world wants and “needs”
    gh

  • Pingback: From Science to Business – How Firms Create Value by Partnering with Universities | Beyond The First World

  • http://www.agilityinnovation.com Paul Hobcraft

    Georges, Universities are critical to feed the innovation pipeline more than ever. The problem is not wanting to achieve a dialogue, it is breaking down the delay, reiterations any discussion has for where the IP resides, the commercialisation and this part of the equation creates roadblocks. The likes of P&G enter exclusive arrangements with certain universites so invest the time in resolving this issue between the involved parties but this is not the case in many. How can this often tortuous set of negotiations be resolved so when University partners sit down opposite business they have a better mandate to proceed. The structure of universities to gain approaval and commitment to legally binding aspects needs streamlining or locating in a given office, delegated to manage this.

  • http://www,sciencetobusiness.ch HAOUR Georges

    I am well aware of the difficulties in firms and universities negociating. It sounds sometimes like a dialogue between cats & dogs.
    In many cases, the IP issue is not a problem, though.
    gh

  • http://www.ausicom.com Rowan Gilmore

    In Asia Pacific where we work, the other benefit of universities working with existing local firms to transfer IP is that the local firms are “stickier” than start up firms, and more successful at executing their strategy as well, since they have pre-existing channels to market. Start up firms need to be funded by venture capital, which is scarce to begin worth. Worse, the successful ones are sold upon exit by the VCs and end up being forced to relocate to California. All the local value created through publicly funded research is transferred out of the country. See http://www.ausicom.com for more.

  • http://www.agilityinnovation.com Paul Hobcraft

    Perhaps you are right, it is just the cats and dogs. Time for the protection agency to start rounding all these strays up!

  • http://www.sciencetobusiness.ch Georges HAOUR

    This problem is similar to that in the UK. Many start ups there are bought by US comnpanies and, very soon, no job remains in the UK.
    The WTO does not want rules preventing this. So much for the £ invested.
    best
    G

  • http://www.mindforceconsulting.com Rogelio Nochebuena

    Julye,

    You are right there is a speed differential between industry and academia, and also many of the professors in all the universities around the world have place more emphasis to teaching than to collaborate with industry.

    The only way you can convince to academics that working with industry to promote innovation and establish collaborations, is by way of giving them examples of highly regarded academics that are also entrepreneurs, who also do sponsored research for industry.

    Three examples come to my mind my old friend and mentor Dr. Cal Quate at Stanford who even when almost 80 years of age is still doing great work in the areas of Nanotech, MEMS and others, but also consults for HP, and other companies and has interests in several successful star-ups.
    Other people include another good friend Prof. Nate Lewis at Caltech who is very involved in energy storage and a new family of inexpensive and very efficient of thin-film photovoltaics and has been involved in several ventures including his latest deal where also Prof. Harry Atwater is involved where they have risen over $20M.

    Last but not least is Nobel Laureate Prof. Robert H. Grubbs also at Caltech who is involved in doing top research but also serves as an advisor to companies such as CFX Batteries (company founded by my pal Dr. Rachid Yazami) and many other ventures included Calendo. Who also was the co-founder with Nate Lewis of Cyrano Technologies.

    So it is possible to teach, collaborate with industry and do research at the same time, and still have a balanced life in all cases these outstanding researchers have a very good family life and enjoy recreational and cultural activities.

    The final reason why they need to collaborate with industry is that industry is willing to equip their labs and provide them with better facilities if they do work more expeditious work for industry.

    By doing that they also help their students to create an entrepreneurial spirit that Mexico needs so much.

    Best wishes
    Rogelio

    PS. if you need to promote UNAM’s technology MindForce Consulting can help you.

  • http://www.sciencetobusiness.ch HAOUR

    ….and guess what ? THE book From Science to Business is finally available, as of October 18, 2010
    Have a good read and give us your feedback !
    youpidoo!
    Georges Haour

Ad

STAY CONNECTED

 
Ad