Accelerating Commercialization and
Innovation: The U.S. Experience with
the Triple Helix
Richard A. Johnson
KEFVIII – INSEAD, Fontainebleau, France
29 April – 1 May 2009
johnsri@alum.mit.edu
Triple Helix: Accelerating Commercialization By
Reinventing the Role of U + I + P: 5 U.S. Examples
• Technology Transfer and the U.S. Bayh-Dole system
• Shift to Industry-University-Government Collaborations and PublicPrivate Partnerships as the Emerging Model for Commercialization
• National Laboratories and Government Departments as
Commercialization Accelerators and Facilitators
• Experimenting with a Diverse, Flexible and Changing “Toolkit”
through Increased Entrepreneurship and State/Regional Initiatives
• Viewing Commercialization and Technology Transfer as Integral
Parts of a “Systems Framework” for Innovation in a KBE
Bayh-Dole and U.S. Commercialization of Publiclyfunded R&D: 30 years of experience
•
Universities, Non-profits, SMEs obtain title to IPR developed with public
funding by faculty, students or employees (IPR is not the goal of publiclyfunded R&D, just a by-product)
•
Universities/Public research labs/Non-profits must seek to commercialize
research that results from publicly-funded R&D
•
Government receives royalty-free, non-exclusive license for procurement
but no right to government pricing control over products/services from it
•
Government retains “march-in” rights if university/public lab/SME fails to
adequately commercialize
•
Preference in licensing to SMEs
•
Royalties/payments must be shared with the inventor(s) and reinvested
Transferring University and Public Research Organization
Technology to Firms
SALES $$
ROYALTIES
or EQUITY PAYOUT
UNIVERSITY
SBIR
NEW PRODUCTS
& PROCESSES
License
Agreement or Equity
RESEARCH $$
•
•
•
COMMERCIAL
COMPANY
INNOVATION
INVESTMENT $$
Licensing to existing companies – brings royalty $
New company formation – brings royalties and/or equity
Other, less direct, contributions to regional economic
Drawn from C. Gabriel, Carnegie Mellon University
activity
7
U.S. Technology Transfer in Operation
• Each university/public laboratory establishes its own
policies, royalty-sharing, and governance system
– TTO deducts ≈ 15-20% for overhead and costs (►net royalty)
– Common allocation (Stanford, U. of Washington) – create
incentives among all key stakeholders:
• 1/3 inventor(s)
• 1/3 academic department or lab at public research centers
• 1/3 School and/or University general funds
– Scaled allocations depending on size of payments (Harvard,
Brown, many state universities – public): inventor receives
greater % for smaller amounts
• General rule: All research must be publishable
• Increasing trend to equity-sharing deals for start-ups
• Department/University/Labs must reinvest returns
Promoting Commercialization Benefits for Faculty and
Researchers – It’s Not Just about the Money
• Financial – important incentive but often not the key reason
– Additional personal income
– Research funding to PI’s lab or center
– Paid consulting arrangements with licensee or start-up (consistent with strict
university policies on Conflict of Interests and Conflict of Commitment)
– Service on Scientific Advisory Board of start-up companies
• Career and prestige – faculty/PIs want innovation/commercialization
– Enhances and improves quality of investigators’ Fundamental Research (asks
new questions; provides new feedback; ensures rigor and quality)
– Key selling point for attracting and retaining best academic/research talent
– Considered for tenure and advancement at some universities/labs
– Access to additional Human Capital and talent beyond the university
– Ability to leverage and use equipment, tools, and cutting-edge infrastructure
– Successful Serial Entrepreneurs have high prestige in their field and with public
(Examples – John Hennessy (Stanford President); John Donahue (Brown neuroscientist);
Phil Sharp (MIT Nobel Laureate – Biogen and Alnylam); Robert Langer (pre-eminent MIT
chemist and engineer, created >60 successful companies);
The Entrepreneurial University and Technology Transfer Enables
Excellence in Core Academic Missions – Research, Education and
Public Service
•
Universities as Engines of Economic Growth and Hub of 21st Century
Knowledge-based Economy (Research, Education, Public Service)
– Google, Genentech, Cisco and thousands of sustainable SMEs
– Entrepreneurs and SMEs drive the U.S. economy and job creation
– 27 universities >$10 million/year in gross income from licensing
and fees; >200 American universities active in U+I tech transfer
– >$42 billion/year in new economic activity in United States
– Invention disclosures = 19,827; 3,622 new university patents
(2007)
– 555 new start-up companies from universities in 2007
– 686 new products introduced to markets in 2007 (5,036 in 10
yrs.)
– 12,000 + licenses and options producing income
Slide 10
– Significant new job creation with higher wages
Some American Triple Helix Commercialization Results
• 550,000 small businesses created 1996-2004
• 17% of GDP and 9% of jobs came from venture capital-back startups, most of which originated in universities or with public R&D
• IPR and university/national lab revenues are not the primary goal – it
is not about the money; it’s about driving new interactions, insights,
collaborations and solutions that accelerate commercialization
across the knowledge supply chain and entrepreneurial ecosystem
• “People don’t buy technology, they buy solutions” (Lita Nelsen, MIT)
• It’s much more than just S&T, R&D inputs, patents and publications,
and it is not a linear process
MIT May Be Sui Generis, BUT It Shows What an
Entrepreneurial University and Ecosystem Can Achieve
• Commercialization from the MIT entrepreneurial
ecosystem = the 11th largest economy in the world
• MIT- related companies globally = 25,800
• Job creation = 3.3 million jobs around the world
• Global world sales from MIT companies = $2 trillion/year
• New company formation from the next generation MIT
entrepreneurial environment is accelerating > 5,600 new
companies in United States since 2000
• Huge regional and local impacts – not just economic,
and many outside the United States
6 New Tech Transfer Trends in the United States
• Universities increasingly viewed as key parts and leaders of
complex Entrepreneurial Ecosystems
• Promote Access and Diffusion – e.g., license IPR more creatively to
spur innovation and meet social needs: 9 core principles now guide
licensing to balance public and private needs
• No longer just S&T, biomedicine and engineering
-- Design and New Media
-- Knowledge-intensive services
• Focus on collaborative research and broader/deeper partnerships
• Social Innovation and Relational Nets are key, new aspects for
commercialization of public R&D – focus on relationships,
organizations, interactions and trust; align with social networking
• Globalization of the American universities and international
universities creates new challenges and opportunities for
accelerating commercialization: new global networks/linkages
Government Departments Have Increased Propensity to
Commercialize Their Research – e.g., National Institutes of
Health (NIH)
• Largest publicly-funded R&D to advance public health; Budget ≈
US$27 billion; 27 Institutes, Centers and Divisions: 60,000
awards/yr; 18,000 employees; active Office of Technology Transfer
• NIH views commercialization as key to promoting public health
• Robust NIH pipeline and >2,500 patents
• Novel, fundamental research discoveries and inventions
• “Supermarket” for research tools and materials in biomedicine
• >2,000 active licenses with product sales > US$3 billion/year
• NIH researcher/inventors also get royalties – capped at $150K/year
(30 researchers at NIH are at annual cap)
• NIH has commercialized more than 250 biomedical technologies
• Social capital (broad interactions and collaborations) increases the
likelihood that NIH researchers will commercialize their research
Increased Industry Role for Commercializing Public R&D – The 3 R’s
(IBM) for Creating Mutual Value and Accelerating Innovation
• Reach and Modes of Engagement
– Skills development and support for educational infrastructures
– Lifelong learning, retraining and courseware development
– Virtual, face-to-face, peer-to-peer, partnerships
• Research (Discovery-driven and Solutions-driven)
– Increased focus on Innovation and leveraging public R&D
– Collaboratories and sustained partnerships (bi- and multidirectional among U+I+P); deep exchanges and mobility
– Access to and sharing of equipment, tools and infrastructure
• Recruiting and Human Capital
– Top talent for the future
– Internships, co-ops, post-docs, team based project challenges
U+I+P Strategic Partnerships – “No One Size Fits All”
• Sponsored Research and “windows into research”
• Increased trend toward “Collaboratories” and other
longer-term, multi-directional partnerships
• “User-driven Innovation” and distributed R&D networks
create new commercialization opportunities
• Integrating entrepreneurial ecosystems and investments
• Public-private partnerships for addressing societal issues
• Social Entrepreneurship and Venture Philanthropy
• Pre-competitive consortia (National Institutes of Health -GAIN, TCGA, SNPs, HapMap) and shared infrastructure
• Location-specific competencies: the role of clusters/hubs
U.S. National Laboratories: A New Role as
Commercialization Accelerators
•
•
•
•
•
•
•
Major shift toward commercialization in last 10 years
Technology-based economic development at all levels
Wide use of CRADAs and de-centralized collaborations
Affiliated incubators and S&T research parks
Technical assistance and brokering services for SMEs
Mentoring, educational outreach and career metrics
Leveraging expensive government-funded research
equipment and tools; shared access and services
• Small Business Assistance programs: 650 at Sandia Lab
• Sponsor venture capital forums and link to capital flows
• Commercialization Incentives – financial and personnel
The Current U.S. Toolkit for Accelerating
Commercialization is Marked by its Diversity
• Incentives, not mandates: flexible and market-oriented
• Innovation awards for start-ups and SMEs – the SBIR
program and others
• Entrepreneurial ecosystems – universities, regions,
national labs, 50 American states, and industry clusters
• Incubators, research parks and clusters (some virtual)
• Entrepreneurship best practices, competitions, mentors
• Champions, meritocratic and sustainable funding
• Pre-competitive public-private consortia
• Public-private partnerships for societal grand challenges
$143
billion
TheSocial
SBIR “Open Innovation” Model
and
Government Needs
Private Sector
Investment
PHASE II
Research
towards
Prototype
PHASE I
Feasibility
Research
$100K
PHASE III
Product
Development
for Gov’t or
Commercial
Market
Non-SBIR
Government
Investment
$750K
Tax Revenue
Federal Investment
© Charles W. Wessner
22
Some Lessons from the U.S. Experience in Accelerating
Commercialization from Public R&D that Are Overlooked
• Key Role of “Soft Infrastructure”, Intermediaries and Risk Investors
• Commercialization Critical to Basic Research and University Role
• Supportive Entrepreneurial Climate and Policies
– Technology Seeds Must Land on Fertile Fields
– Failure is Tolerated (and Celebrated) and Risk Taking viewed as a “positive”
• Immigration as a Source of Talent and Drive – 35-40% of U.S. startups and entrepreneurial activity in last 25 years came from persons
not born in the United States
• Vigorous Domestic Competition and 50 States Funding (not federal)
– the competition for economic activity, jobs and investment among
the 50 U.S. states is intense (regions, clusters) and accelerates
commercialization and innovative activity with publicly-funded R&D
• Increasing Focus on Whole-of-Government Framework Conditions –
Tax Policy, Labor Mobility, Competition, Human Capital, Innovation
An Emerging New Toolkit for Accelerating
Commercialization in SMEs at Global Scale
• Focus on Knowledge Markets and Intellectual Assets
• Virtual technology accelerators (plus physical incubators)
• On-line matchmaking and social/business networking
tools for SMEs and national innovation infrastructures
• Linking global “brain circulation” strategies with global
and regional commercialization and clusters
• Harvestable Innovation – a new approach
• Open Innovation collaborative mechanisms to overcome
the limitations of size, geography, and global “bandwidth”
• The hub of U.S. initiatives is at the local, regional and
state level (“bottom up” driven with “top down” support)
The Innovation Framework
Slide 25