Wednesday, April 16, 2014
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Recession can't dampen university tech transfer

The latest statistics show that the nation's universities, hospitals and research institutes executed more licenses and boosted research spending over the previous year.

Recession can't dampen university tech transfer

I have a hard time believing that there’s a lack of innovation in the United States right now.

Technological change seems to be everywhere in daily life - in the workplace, at home, even inside the convenience store and on Philadelphia’s sidewalks with its new parking-payment kiosks.

Given that I need a different charger for the various electronic devices plugged in all over my house, I’d even trade a little innovation for some standardization.

The pedestrian economic recovery from a bruising recession has prompted many politicians to call for more emphasis on encouraging innovation, especially commercializing more of what is invented on college campuses. The implication is that very little of the research being done at universities is translating into new products, new companies, and new jobs.

However, the latest survey of technology-transfer personnel at many of the nation’s universities, hospitals, and research institutes shows that they executed more licenses with industry, increased research spending, and formed the same number of start-up companies in fiscal 2009 as they had the previous year.

“I’m ecstatically pleased with how the data came out,” said Ashley J. Stevens, president of the Association of University Technology Managers.

Pleased because the survey shows the activity of academic tech-transfer offices remained robust amid the recession. Universities reported activity for their fiscal years, which generally run from about July 1, 2008, to June 30, 2009. Hospital fiscal years tend to run from Oct. 1, 2008, to Sept. 30, 2009.

For example, the 181 institutions surveyed said they formed 596 start-up companies last year, virtually equal to the 595 launched the previous year. Stevens said one-quarter of those start-ups are in just two states - California and Massachusetts. But academic tech-transfer offices created at least one start-up in every state, except for Alaska, last year.

The start-up hotbed was the University of Utah, which created 19 companies from university research in 2009. That nudged the Massachusetts Institute of Technology and California Institute of Technology into a tie for second place with 18 companies apiece.

Pennsylvania and New Jersey remain a bit challenged when it comes to swimming in the entrepreneurial soup, forming just 29 firms in 2009, according to the association’s data. The University of Pennsylvania and Drexel University each formed three. Carnegie Mellon University in Pittsburgh topped the 10 institutions in the two states with 10 start-ups.

The economic slowdown did do a number on the dollars generated by the offices on campus in charge of commercializing academic innovation.

The total amount of license income received declined 32.5 percent to $2.33 billion. In part, the fall can be explained by the lack of enormous onetime payments by industry to academic institutions in 2009. There were several paid in fiscal 2008, including $182 million from the sale of royalties for a childhood vaccine that was created from research done at Children’s Hospital of Philadelphia.

Excluding such outlier payments, total license income was $2.13 billion in 2008 and $1.92 billion in 2007.
Of course, overlooking windfalls like that would be akin to ignoring grand slams in baseball. It is why tech-transfer professionals play the game. The rarity of home runs is what feeds outside criticism of them.

“It’s become very fashionable to say we could do technology transfer better,” Stevens said. “I’m not sure what that means.”

If Stevens sounds defensive, it’s because for the 19 years that the Deerfield, Ill., organization has been conducting the survey, the commercialization rate of academic research has remained at about 25 percent. Steady through boom and bust and despite big increases in the amount of money and staff devoted to getting more ideas out of the lab and into the marketplace.

He may not be proud that tech-transfer professionals wind up failing 75 percent of the time. But it’s important to remember that venture capital investors fail a lot, too, and they’re investing at a later stage than the universities and research institutes are.

University tech-transfer offices were busy in 2009, filing 12,109 new-patent applications and receiving 3,417 U.S. patents. Total research spending rose 4.7 percent to $53.9 billion, with $33.3 billion of that coming from the federal government.

Still, most universities receive less than $3 million annually in income for all that hard work. The University of Pennsylvania generated $11.7 million in license income, the most of any local university. Thomas Jefferson University received $5.5 million, while Temple University got $340,965 and Drexel University $178,499.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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