Technology transfer sounds like a simple enough concept, with a very obvious rationale. University researchers generate all kinds of new knowledge that could have great commercial potential if only entrepreneurs knew about it. Understandably, the governments that largely fund the research are extremely keen that this potential be realised as effectively as possible. But what exactly that should entail and how it can best be done are questions that universities and policymakers have been puzzling over for 40 years or more.
George Bernard Shaw’s aphorism about the UK and the US being divided by a common language is rarely better illustrated than in this sphere, for instance. Technology transfer became widely established in US universities with the enactment of the Bayh-Dole Act in 1980. This gave universities the right to own the patents arising from the results of government-funded research and to license them for commercial development. Royalties could then be charged by the universities, providing an economic incentive. In return, universities had to demonstrate their compliance with the regulations on exploiting intellectual property by reporting annually on their patenting and licensing activities.
This emphasis on patenting and licensing has determined the shape and scope of US universities’ technology licensing offices (sometimes known as technology transfer offices), which focus on the protection, promotion, marketing and licensing of intellectual property. But this focus on technology flowing from university to industry via licensing can make it difficult to keep track of the full scope of university-industry interaction, especially in areas such as consulting, incubators and executive education.
In the UK, technology transfer had a different genesis. Instead of introducing legislation, the government used financial incentives to encourage universities to develop capability. In England, a funding stream known as Higher Education Reach Out to Business and the Community (HEROBaC) was introduced in 1999; this later evolved into the Higher Education Innovation Fund (HEIF), currently worth £210m a year (up to £4.4m a year for a single university). These grants have not been prescriptive regarding how universities should interact with business, with funding distributed on the strength of universities’ self-generated plans for doing so, as well as their past performance in attracting external income.
This lack of prescription has allowed different UK universities to develop very different models, depending on their research strengths, local economic conditions and institutional strategies. The large research-intensives set up or enlarged their technology transfer offices, to function along similar lines to their peers in the US. Smaller, less research-intensive universities, meanwhile, focused more on local businesses, offering them consultancy, networking opportunities, project management, executive education and facilities and equipment for rent. That said, even in a research-intensive university such as the University of Cambridge, consultancy is one of the fastest areas of growth.
The potential commercial value of the knowledge that exists in university faculties of arts, humanities and social science has also been more consciously recognised in the UK – as has the idea that commercialisation is not just a one-way process of universities’ passing on the fruits of their research to the commercial sector. This has led to discomfort with the perceived narrowness of the term “technology transfer”, with “knowledge transfer”, “research commercialisation” or “knowledge exchange” all suggested as alternatives. A well-respected UK university once even threatened to withdraw from an otherwise excellent programme that contained the “T-word” because “what we do is not technology”.
But the US concept of technology transfer is also evolving. In a 2016 article on LinkedIn, Arundeep Pradhan, president of innovation and entrepreneurship training and management firm Apio Innovation Transfer, describes an evolution towards “technology transfer 4.0”, which includes many of the activities common in UK universities, including “robust start-up programs and start-up funding, industry collaboration, and business development”. However, consultancy is still commonly viewed as a personal activity in the US, and conflict of interest policies often forbid academics from carrying it out in the name of the university.
In both the US and the UK, the development of professional associations – the Association of University Technology Managers (AUTM) in the US and what is now PraxisAuril in the UK – has played an important role in catalysing and monitoring developments. These organisations have collaborated, with each other and with other national associations, to develop global standards of professionalism, recognised by the international “Registered Technology Transfer Professional” (RTTP) designation.
And the results of all of this are impressive. The UK continues to beat itself up over its supposed inability to capitalise commercially on the global excellence of its research, but it should not. From a very low base 30 years ago, university-business collaborations in the UK now total £4.2 billion a year, and more than 30 per cent of academics have had experience of working with business.
Other countries have also woken up to the opportunities that the “knowledge economy” offers, particularly in light of the decline or eastward migration of many of their traditional industries.
Yet working through the differences in possible approach is even more critical for emerging economies. It is clear that there is no one-size-fits-all international model. Licensing-only approaches, encouraged by Bayh-Dole-style legislation, may be unsuitable or unaffordable in many countries. A more flexible, holistic approach fits better with economies whose national research budgets are small and whose universities can’t afford to invest in IP, or where IP policy is underdeveloped or poorly understood in the commercial sector.
Additional considerations include the quality of the research and innovation in the country in question, any barriers to entering local markets and the availability of investment capital and entrepreneurial, technical and management skills.
Educational and university policies have to be revised to be in sync with national strategy. Universities need to understand any new legislation and its motivation, and develop compatible strategies for business engagement that are appropriate for their environments. They need to take into account their local and regional economies, plus any legal constraints that relate to technology transfer. For example, are university students allowed to set up companies? What about postdoctoral researchers or faculty? And who is allowed to consult, or do industry-sponsored research within the university? What are the incentives for engaging with industry and for exploiting university inventions? How easy is it for companies to identify and access the knowledge available in universities? How does government policy encourage or inhibit scientists from thinking entrepreneurially? How are risk and failure viewed culturally?
There is an increasing tendency for many universities and research organisations in developing countries to assess the performance of their technology transfer offices in terms of the number of patents filed and the licensing income generated from them. But while these may indicate, to some extent, a measure of success, they will not capture the entire impact of university research and education – and may work against it. The number of patents filed is no indication of the amount of revenue generated, or of knowledge transferred.
Any expectations of quick financial rewards for the institution from such endeavours alone are doomed. Technology transfer should, instead, be treated as a long-term investment, whose impact is measured by a broader range of metrics, such as the number of entrepreneurs and start-ups created, the number of direct and indirect jobs created by them, and the number of graduates from the institution hired by the licensees. At a national level, the resulting increase in the tax base and the retention of skilled manpower within the country should also be considered.
In this context, we should welcome the recently proposed metrics for the UK’s new national assessment of what oversight body Research England has chosen to call knowledge exchange. The knowledge exchange framework, as it is known, constitutes a bold attempt to measure the full range of business and community engagement, from IP commercialisation to unpaid time devoted to museums and performances. Moreover, the focus on pre-existing datasets will be applauded for avoiding imposing mountains of extra work on universities.
Responses to Research England’s consultation on the metrics may note that gaps in the picture will remain unless further metrics are adopted, such as jobs created, students absorbed by industry, or external recognition or awards. Nor do the proposed metrics record institutional policies, or assess how such policies influence performance, even though support from senior management is a key factor in the success of technology transfer. But we expect the general response in the consultation to be positive. The proposed KEF metrics and perspectives will provide a comprehensive definition, for the UK at least, of knowledge exchange, and a recognition that it is now a core function of universities.
Nevertheless, governments should be wary of delegating the task of creating knowledge economies entirely to universities. In the UK, many universities have embraced the wider role of creating and managing innovation ecosystems via science parks, incubators, accelerators and venture funds. But there is only so much that they can do in the absence of further government policies to create a commercial sector able and incentivised to capitalise on the technology and knowledge generated in universities.
This is an important lesson for developing countries, too. Their governments would do well to adopt and adapt the lessons of those like the UK and the US that are further down the road of university reform in this area. But they must also remember that “knowledge exchange”, “technology transfer” or whatever else they choose to call it requires two actors who are willing and able to play their part. Innovation policies focused exclusively on higher education are bound to fail.
David Secher is an independent consultant in technology transfer and research commercialisation. He is also patron of PraxisAuril, which he co-founded (as Praxis) in 2002, and a life fellow of Gonville & Caius College, Cambridge. Surya Raghu is a technology entrepreneur based in the US and the founding partner of ETCube International. He works on entrepreneurship, technology transfer and research commercialisation in developing countries.