A recently released report from Brookings entitled "University Startups: Critical for Improving Technology Transfer" shows some dismal figures for tech transfer among American universities, deeming them largely “unprofitable” and lambasting current methods as impractical.
Profitability for university tech transfer offices (TTOs) has historically only been available to the smallest percentage of top tier institutions, with 87% of universities failing to break even over a 20 year average. The vast majority of the revenue generated is through licensing opportunities, of which 70% of all income went to the top 10% of universities.
There is clearly a problem with this model, with most TTOs operating in the red year after year.
Instead of focusing on licensing opportunities (usually to the highest bidder), as the profitable, top ranking universities do, the report suggests a shift toward the less common focus of spin-outs and startups. By shifting in this direction, TTOs can foster increased joint responsibility, and break away from a model that restricts technological access to only those universities and license purchasers with the strongest financial backing.
In addition to the report’s recommendations for an increased push for spin-outs and startups, I believe it’s important to foster relationships between corporate and university departments beyond transactional licensing opportunities, as well as increased corporate and venture capital connectivity, to create an environment where research and technology can fuel innovation and commercial scale-up.
University research teams should also take corporate and public perspectives into account when developing research projects, guiding the research toward practical applications of technology to fulfill unmet needs.
When the figures are presented in such a clear cut way, it’s easy to see that a longstanding model of major university and TTO licensing is not an effective method of getting technology and research into the hands of those who can leverage it for the public good. As recent history has shown, true innovation tends to arise from small groups, startups, and special interest spin-outs. The TTO model needs to reflect this reality.