Hot Universities for Tech Transfer

December 2006 / January 2007 By: Ross DeVol and Armen Bedroussian Volume 4 Number 6

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A Milken Institute study, "Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization," was issued in September. In addition to biotech data, the report included a technology transfer and commercialization index. Excerpts from the study, which is available online at www.milkeninstitute.org, follow.

Three decades have passed since researchers from Stanford and the University of California, San Francisco, began to develop the commercial applications for their work on recombinant DNA and launched the birth of the biotech industry.
The result is a flourishing global landscape of spin-offs, startups and collaborations between biotechnology firms, financiers and academia.

Those linkages were fortified in the United States with the 1980 passage of the Bayh-Dole Act, granting to universities the right to own, license and market the fruits of their faculty research. Nations worldwide quickly followed suit.

Research and innovation are increasingly shifting away from the corporate lab and back to where they began: the university campus. And as the global economy grows increasingly dependent on the generation and dissemination of knowledge, universities are seen as natural partners for both business and government.
For this reason, it is crucial to examine the process of university technology transfer for its strengths and vulnerabilities in order to facilitate the commercialization process and ensure the greatest possible returns on public investment.

Milken Institute researchers examined the biotechnology transfer process taking place at universities, from knowledge creation to technology transfer and early stage commercialization. A key focus of the investigation was the role played by technology transfer professionals. Research is essential for commercial outcome, but the technology transfer professional is crucial in the successful conversion of knowledge to the private sector.

Key Findings:
—€ Harvard University ranks first in terms of biotech research, as measured by papers and citations, followed by the University of Tokyo and University of London. U.S. universities hold eight of the top 10 and 28 of the top 40 positions. California universities hold five of the top 25 rankings; the UK and Japan hold three each.
—€ The University of Texas system scores first on our Biotech Patent Composite Index, followed by UC San Francisco—€” which is likely first among individual campuses since the University of Texas doesn't report data on individual campuses—€”and Johns Hopkins. Nine of the top 10 patent holders are U.S. universities. The University of London ranks first among foreign universities (10th overall).
—€ The Milken University Technology Transfer and Commercialization Index shows MIT first on outcome measures, which include such factors as licensing income and startups. The University of California system ranks second (led by UC San Francisco), with Caltech third, Stanford fourth and Florida fifth. The University of British Columbia was the highest-ranked Canadian institution, coming in eighth overall.
—€ Among U.S., Canadian and European universities, the United States leads in invention disclosures, patents filed and granted, licenses executed and licensing income. However, European universities surpass their U.S. counterparts in startups established.
—€ Investments into offices of technology transfer (OTT) also offer high returns. For every $1 invested in OTT staff, the university receives a little more than $6 of licensing income.
—€ In terms of job creation, the Amgens and Genentechs most differentiate the economic impact of U.S. university-based biotech commercialization that originates from universities in other nations.

University research tends to be oriented toward basic research that addresses long-term, fundamental scientific discovery and knowledge. An increasing share of the funding—€”from government, industry, nonprofit donor and other sources—€”is going into biotechnology and the life sciences, as evidenced by the dramatic increase since 1995 in university patenting.

The core mission of the world's leading research universities is education, discovery research and the dissemination of knowledge. It is also understood that the commercialization of research and knowledge is controversial to some audiences.

Many academic researchers are conflicted by the greater focus on commercialization, feeling that it might impede research in areas with a lower probability of direct-market applicability but which could nevertheless lead to advances in fundamental scientific knowledge. We maintain that technology transfer reflects the delicate balance of a university's wider culture and is, in fact, an important byproduct of its mission.

The phrase "university innovation pipeline" refers to the support and process infrastructures that enable a university to convert its research and creativity into commercially viable intellectual property. A rich innovation pipeline plays a pivotal role in a university's ability to commercialize its research.

For this study, we analyzed national and international university biotechnology and overall innovation pipelines, using three measures of comparison: publication rankings, patenting activity and office of technology transfer outcome measures, or how universities perform in the overall innovation pipeline. We developed indexes that allow a systematic comparison and rank individual universities among their peers. Any ranking system presents challenges and requiressome subjective weighting of the components.—€¦We believe that our approach will contribute to informed discourse on best practices.

U.S. universities are the world leaders in transferring intellectual property to the private sector. The United States retains a large lead in biotech research at its top universities. Nevertheless, as European, Asian and other governments in the Americas realize how important universities have become in the global innovation race and, indeed, in the race for national competitiveness, the U.S. lead and advantage of absorptive capacity should not be taken for granted.
Furthermore, as cultural barriers to university involvement in commercial applications diminish, the American advantage seems likely to dissipate.

An important aspect of the university-based commercialization process that technology transfer office survey data doesn't capture is the numbers of successful large companies that grew from startups. Advances in bio-and nanotechnology promise further improvements in health, quality of life and economic performance. A fuller understanding of technology transfer process may accelerate the pace at which such benefits reach society at large.

Ross DeVol is the Milken Insitute director of regional economics and Armen Bedroussian is a Milken research economist.