Money Talks, Education Walks?
October 27, 2003

In the third of a series of articles on technology transfer, Larta VOX asks how universities can protect the integrity of their research if they are overly dependent on corporate dollars. Watch for the rest of the series leading up to our Project T2 technology transfer conference November 13th.

By Ketaki Sood, Larta Research Economist

The rewards of the successful commercialization of university-generated discovery are many. Universities gain access to corporate dollars, corporations reap profits from the commercialization of university technology, and eventually, society benefits from the fruits of innovation. New companies and jobs are created as a result of technology transfer, fostering economic growth and development. But, despite the benefits of successful university technology transfer, concerns that universities are becoming excessively commercialized are mounting. Universities are being criticized for acting more like corporate research facilities, than institutions that conduct R&D purely for the sake of promoting science and innovation.

The technology transfer process first gained impetus in 1980, with the passage of the Bayh-Dole Act that granted universities ownership of federally funded inventions, allowing them to patent and profit from their inventions. Universities were encouraged to push their technologies to the marketplace so that the public could benefit from them. Prior to the passage of the Bayh-Dole Act, the government retained ownership of federally funded inventions and companies had to go through a lengthy and convoluted process to obtain rights to their inventions. Furthermore, government funded inventions were licensed non-exclusively, providing little motivation to companies to commercialize R&D pursued at universities.

Collaboration between universities and corporations has grown at a rapid pace since the passage of the Bayh-Dole Act and the relevance of the private sector's role in translating university R&D into a marketable product has not gone unrecognized. But industry and university partnerships in commercializing university-generated discovery have often led to conflicts of interest between the two parties. There have been growing concerns of corporate interest influencing university research improperly. Corporations have been accused of exerting control over the structure of research projects, the interpretation of R&D results and the publication of findings. And the question remains; how do universities protect their independence and preserve the integrity of their research if they are overly dependent on corporate dollars?

Says Rohit Shukla, CEO of Larta, "In the final analysis, the desire to be relevant, the focus on placement of their graduates, and the ever-increasing fiscal demands on universities, coupled with declines in, or raucous legislative debates about, the level of public support, have left universities vulnerable. They are attacked if they don't aggressively pursue commercialization of their incubated technologies, and they are attacked if they open their door to commercial interests. Purists, regardless of their motives, would forever saddle universities with an 18th century model, when the university was truly apart, an iconic ivory tower."

A recent survey by Emory University and the Georgia Institute of Technology of 62 U.S universities found that most university inventions need further development, with only 12 percent ready for practical application when they are licensed to a company. The fact remains: universities need a business partner to create a marketable product.

One also needs to consider if researchers can take on the role of an entrepreneur and successfully bring a technology to the marketplace. Researchers might have the essential personality characteristics to be entrepreneurs, displayed in their initiative, focus and drive to take an idea to a commercially applicable technology. But can researchers transfer these skills to a business environment, where the emphasis is on creating a technology that provides solutions, attracts customers and generates revenues?

Observes Shukla, "The true entrepreneur is driven by passion, not discretion, by flexibility, not doggedness, by quirkiness, not rationalism, and by a highly individualistic drive to succeed. There is no place for objectivity in his or her universe. The average researcher, while individually focused, is conservative by nature, driven by objective reality and a strict adherence to scientific method. However, the entrepreneur and the researcher do not have to be mutually exclusive, and the right framework and the right motivation often will uncover the hidden entrepreneurial gene in the most obstinate researcher."

Despite fears of the conflict of interest between universities and companies, which could possibly impact the independence and integrity of university research, the ties between these two parties will only grow stronger. Already, states have developed programs to foster closer ties between industry and academia, and federal agencies like the Department of Defense and National Science Foundation are investing millions of dollars to promote university and corporate ties.

The writing on the wall is clear. The opportunities to make money out of university research are abound, and cannot be brought to fruition without the help of companies.

Says Shukla, "In a world truly revolutionized and made more accessible by communications technology, the old rules under which we operated will be swept away, regardless of any hand-wringing that may accompany such an enterprise. Universities and research institutions are part of the vital fabric of the marketplace, providing the framework and the big ideas, as well as some of the grist for the mill. Of course, there needs to be constant vigilance by thoughtful people with no outside agenda in order to prevent them from becoming mere playthings of the corporate will. Certainly, a new system of interaction will yield far better results than those provided by the current system."

Read The Promise of Technology Transfer from the October 20, 2003 issue of Larta VOX.
Read Tech Transfer Q&A with Brian Atwood from the October 13, 2003 issue of Larta VOX.
Read Making Knowledge Accessible to All from the September 8, 2003 issue of Larta VOX.
Read The Commercialization of Higher Education from the September 1, 2003 issue of Larta VOX.
Read Technology Treasure If You Know Where to Dig from the August 4th issue of Larta VOX.
Go to the Technology Transfer section of Larta's Research Archive

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