MIT Sloan book highlights successful approaches for university tech transfer
CAMBRIDGE, Mass., July 7, 2014—The university technology transfer process can play a central role in driving innovation and economic growth, however that process is underperforming in many regions around the world. In a new book on the tech transfer system, MIT Sloan School of Management Emeritus Prof. Thomas Allen and Visiting Prof. Rory O’Shea identify successful models of university-based entrepreneurship that are working to increase spin-off activity. The volume, Building Tech Transfer within Research Universities: An Entrepreneurial Approach, is the first systemic attempt to critically analyze the factors behind the creation of successful business spin-offs from university research.
"Given the need to generate knowledge-based jobs and stimulate economic development, there’s a lot of interest in the spin-off process at universities," explains O’Shea. "Yet many tech transfer systems are not achieving the desired results." A primary reason, he notes, is that the focus of many tech transfer offices (TTOs) is based on generating licensing revenue for the university instead of facilitating innovation for societal impact. They are seen as bottlenecks rather than partners in the dissemination of technology.
Allen points out that this is particularly visible at European universities where TTOs often seek large equity stakes and placement on boards of directors, providing no seed investment. In the U.S., some TTOs tend to have a home-run mentality, prioritizing innovations with the best chances of a big payback. "Unfortunately, this can leave 95% of intellectual property on the shelf. In addition, most TTOs don’t generate enough money to cover their own operating expenses," he says.
"Universities need to transition from ‘bureaucratic’ IP commercialization models to a more entrepreneurial approach to accelerating startup activity on campuses," adds O’Shea, noting that the book analyzes current policies, structures, program initiatives and practices at 12 international universities and R&D centers to highlight effective tech transfer approaches. It includes studies of institutions, such as Stanford University, the University of California San Diego, Yale University, Johns Hopkins University and MIT as well as universities in Ireland, the UK, Belgium, France, Singapore and China.
When making revisions to the tech transfer process, the authors caution that it requires a long-term commitment of time and financial resources. Further, success is contingent on the institutional arrangements that enable knowledge transfer and innovation to emerge.
Drawing on the lessons from research institutions discussed in the book, the authors develop a "spin-off performance model" that outlines five central strategies to promote academic entrepreneurship. The five strategies include:
- adopting a "steeples of excellence" research approach to focus on building up faculty strength in a few, but very important, research areas that are capable of generating innovation and funding;
- the establishment of a common mission, guiding principles, and goals of university knowledge transfer within the university setting;
- strong academic leadership and an IP rewards policy that incentivizes university-wide entrepreneurship as well as integrated and coordinated commercialization structures and programs;
- an entrepreneurial culture embedded throughout campus; and
- collaborations with industry and the government.
"If academic entrepreneurship is to emerge successfully within university campuses, there is a need for policymakers to recognize that a comprehensive systems approach to the identification, protection and commercialization of university intellectual property must be adopted," says O’Shea. "Our spin-off performance model is intended to assist universities in starting up companies and aid policymakers in providing the appropriate support for this process."
Allen adds, "The bottom line is that the current tech transfer system at most universities needs improvement to meet the goal of facilitating and disseminating innovation. It’s time to look at models that work and start making revisions."
Thomas Allen is the Howard W. Johnson Professor of Management Emeritus at MIT Sloan.
Rory O’Shea is a visiting professor in innovation and entrepreneurship at MIT Sloan and a faculty member at the Smurfit Graduate School of Business of University College Dublin.
Read more information about their book, which will be published by Cambridge University Press.