Commercial knowledge transfers from universities to firms: improving the effectiveness of university–industry collaboration

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Abstract

There has been a rapid rise in commercial knowledge transfers from universities to practitioners or university–industry technology transfer (UITT), through licensing agreements, research joint ventures, and start-ups. The purpose of this study was to analyze the UITT process and its outcomes. Based on 98 structured interviews of key UITT stakeholders (i.e., university administrators, academic and industry scientists, business managers, and entrepreneurs) at five research universities in two regions of the US, we conclude that these stakeholders have different perspectives on the desired outputs of UITT. More importantly, numerous barriers to effective UITT were identified, including culture clashes, bureaucratic inflexibility, poorly designed reward systems, and ineffective management of university technology transfer offices (TTOs). Based on this qualitative evidence, we provide numerous recommendations for improving the UITT process.

Introduction

In the 1970s, American universities were criticized for being more adept at developing new technologies than moving them into private sector applications (US General Accounting Office, 1998). Policymakers asserted that the long lag between the discovery of new knowledge at the university and its use by companies was seriously impairing the global competitiveness of American firms in such key industries as steel, automobiles, televisions, and semiconductors (Marshall, 1985). In 1980, Congress attempted to remove potential obstacles to university to industry technology transfer (UITT) through legislation, which became known as the Bayh–Dole Act (Feldman, Link, & Siegel, 2002). Bayh–Dole instituted a uniform patent policy across federal agencies, removed the restrictions on licensing, and allowed universities to own the patents that arise from federal research grants. Presumably, these changes would give universities greater flexibility in negotiating licensing agreements, and firms would be more willing to engage in them. The framers of this legislation asserted that university ownership and management of intellectual property would accelerate the commercialization of new technologies and promote economic development and entrepreneurial activity.

It appears that Bayh–Dole has indeed brought research universities closer to practitioners and entrepreneurs seeking to commercialize university-based technologies (Jensen & Thursby, 2001). In the aftermath of this legislation, many universities established technology transfer offices (henceforth, TTOs) to manage and protect their intellectual property. The role of the TTO (sometimes referred to as the Technology Licensing Office) is to facilitate commercial knowledge transfers (or technological diffusion) through the licensing to industry of inventions or other forms of intellectual property resulting from university research. There has been an impressive rise in UITT activity, as evidenced by an increase in the number of patents granted to US universities from about 300 in 1980 to approximately 3700 in 1999 and a threefold increase in licensing of university-based technologies to firms since 1991. Annual streams of revenue accruing from these licenses have risen from about US$160 million in 1991 to US$862 million in 1999, now constituting about 2.8% of university R&D expenditures. More importantly, numerous products in a wide variety of key strategic high-technology industries (e.g., computers, pharmaceuticals, agriculture, biotechnology, and instruments) have been developed through UITT. These include internet search engines (e.g., Lycos), the Boyer–Cohen “gene-splicing” technique that launched the biotechnology industry, CAT scanners, diagnostic tests for breast cancer and osteoporosis, music synthesizers, computer-aided design (CAD), and environmentally friendly technologies (US General Accounting Office, 1998).

Despite the potential importance of UITT as a source of financial gain to universities and firms and as an engine of economic growth, there is little systematic understanding of organizational practices in the management of university intellectual property. Furthermore, little attention has been paid to the managerial or private sector implications of UITT. Given that the stakeholders in this process of knowledge transfer (e.g., university faculty, university administrators, private sector managers) have different motives and behaviors and operate in different environments, there is room for considerable disagreement and misunderstanding about the UITT process and how it should be managed. Nevertheless, the “boundaryless organization” philosophy driving change at firms such as General Electric argues for eliminating boundaries vertically down hierarchies, as well as horizontally across departments (Ashkenas, Ulrich, Jick, & Kerr, 1995). Moreover, boundaries between a firm and its customers or suppliers (e.g., universities) should be reduced. In this paper, we present reasons why such boundaries exist between universities and firms and prescribe methods for making such boundaries more seamless.

Thus, the primary goal of this paper is to improve our understanding of UITT so that the managers of the process in universities and industry can enhance its effectiveness. We provide a number of recommendations based on a series of 55 interviews we conducted with 98 UITT stakeholders at five research universities in two regions of the US. These stakeholders included university scientists and administrators, industry scientists, R&D managers at large companies, and entrepreneurs.

The remainder of this paper is organized as follows. In the next section, we analyze the UITT process and examine the goals, motives, and cultures of its major stakeholders. This is followed by an in-depth description of our qualitative methods. We then summarize the field evidence and identify the key outputs of UITT, as well as organizational barriers to the effectiveness of the process. Next, we provide recommendations for technology managers at universities and firms regarding ways to enhance the effectiveness of commercial knowledge transfers between universities and firms. The final section consists of conclusions and reflections on UITT in the 21st century.

Section snippets

Technology transfer in a university setting

Technology transfer is usually thought of as occurring within or across firms, such as the dissemination of information through transfers of employees from one division or country to another (intra-firm transfers of technology). Indeed, much research has focused specifically on the flow of technology transfer within a large R&D organization, or from an R&D subunit to the larger organization (Allen, 1984). In this paper, we focus instead on the UITT process, or commercial transfers of scientific

Method

Our results and recommendations are based on semi-structured, in-person interviews with three categories of UITT stakeholders: (1) TTO directors and university administrators, (2) academic scientists, and (3) managers/entrepreneurs. We focused our analysis on five major public and private research universities in Arizona and North Carolina. These universities have relationships with many large and small firms and have also spawned a number of start-up companies. Each of these schools

Results and recommendations

In this section, we present our qualitative results regarding stakeholder perceptions on various aspects of UITT. Based on these perceptions and our understanding of how management theories can be applied to UITT, we provide some recommendations for university-based and firm-based improvements in the effectiveness of UITT.

Our interviews revealed that the outputs most frequently mentioned by TTO directors and university administrators were licenses and royalties, which is not surprising since

Conclusions

In the “new” economy, there is a stronger emphasis on intellectual property, venture capital, and entrepreneurial start-ups. The recent increase in UITT, managed through a TTO, has led to a concomitant rise in the incidence and complexity of research partnerships involving universities and firms. This has led to considerable tension and inefficiency in university management of intellectual property. That is not surprising since formal university management of a portfolio of intellectual

Acknowledgements

We thank Nicholas Argyres, Susan Helper, Adam Jaffe, Julia Liebeskind, participants at the 1999 Academy of Management meetings in Chicago, and especially, Mike Wright, for their insightful comments and suggestions. We are also deeply indebted to the many administrators, scientists, managers, and entrepreneurs who agreed to be interviewed. Martha Cobb and Melissa Zidle provided capable research assistance. Financial support from the Alfred P. Sloan Foundation and the National Bureau of Economic

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