Technology Commercialization as the Basis of

Today’s research university is valued not only as a provider of education andresearch, but as a center of innovative activity and a generator of new know-ledge and technologies. And while education and research remain the mostimportant functions of the research university, some institutions have takensteps to encourage entrepreneurship, to promote regional development, and toengage in what is known as technology commercialization.1

Technology commercialization is the act of turning the research results ofa university (ideas, inventions, new technologies) into products that can be soldin the marketplace. The development of technology commercialization is con-nected with the emergence at universities of new functions—scientific and tech-nical entrepreneurship, business incubation, the creation of new companies, andthe implementation of innovative projects.

Who benefits from technology commercialization? All stakeholders in theprocess: universities, businesses, professors, students, investors, government,society, the local and national economy. The outcome of technology com-mercialization is especially evident in the United States where there are majorresearch universities (Boston, Silicon Valley, etc.).

Today, universities in many countries, following the lead of US universities,successfully engage in technology commercialization and act as an importantchannel for knowledge and technology transfer to the private sector. One countryin which technology commercialization has not been fully successful, however,is Russia.

In Russia, technology commercialization struggles for several reasons.Through recent policy initiatives, coupled with investment in physical infra-structure, Russia has built the components of an innovation ecosystem. Butit lacks many things that would encourage technology commercialization suchas an entrepreneurial culture and innovative environment, strong projectteams and skilled inventors in business, and entrepreneurship education. Whatis more, as we have learned from our own experience and from conversationswith colleagues, in Russia the state and the universities are highly centralized,intellectual property is poorly protected and the patent process is a mereformality with little or no standards, and there is an excessive concentrationon formal procedures, on filling out statistical reports and observing indicators,etc. As a result, Russia has yet to find a way to consistently convert the know-ledge and technologies developed by its universities into saleable products.

Fortunately, Russia can examine the experience of technology commercia-lization at leading US universities and implement steps to improve the process.In this paper, we thus propose that Russia can improve its technologycommercialization by studying the example of the leading US entrepreneurialuniversities and implementing proper procedures. Although we make severalpolicy recommendations at the end of this paper suitable for Russian society,

Alina Ilinova, Kai Duh

Technology Commercialization as the Basis of Entrepreneurial Universities: The US Experience and Possibilities for Russia

Dr. Alina Ilinova,Assistant Professor,Technology TransferManager, Mining University,St. Petersburg, Russia

Advisor and U.S. HostCounterpart: Dr. Kai Duh, Director, University of Maryland—China JointResearch Park

1

www.irex.org • www.usrf.ru

1 See Speser 2006 and Shane 2004, among many others.

the important overarching point is that Russian univer-sities need to improve their collaboration with industry,and they need to develop new standards of administra-tive, research, and business activity that will promoteinnovation and entrepreneurship.

Before we turn to our policy recommendations, wewill examine the history and state of technology commer-cialization in the United States, best American practices,and challenges in Russia; we will also compare the situa-tion in the United States with the situation in Russia.

1. Technology Commercializationin the United States

In the United States, the successful development of inno-vations in the last decades of the twentieth century wasrelated to the increased attention of government and uni-versities to the management of intellectual property (IP).The beginning of university entrepreneurship can beattributed to the passage of Bayh-Dole Act (1980), whichenabled technology commercialization at US universities.According to the act, a university became the legal ownerof any IP that was created at that university as a resultof publicly funded research (Bremer 1998).2 The lawidentified the fundamental rules for marketing, licensing,and selling the IP. Moreover, universities establishedspecial technology transfer offices and offices of technologylicensing. Consequently, in the years since Bayh-Dole waspassed, there has been a dramatic increase in technologytransfer from research institutions and universities toindustry and an increase in the efficiency of technologycommercialization. The income earned by US universitiesfrom licensing increased from $7.3 million in 1981 to$3.4 billion in 2008 (Tieckelman, Kordal, and Sanga 2010).

Thus, research universities have become the founda-tion for successful technology commercialization as well asboosters of the regional economy. The growth points forthe US economy were chosen by the government extremelywell: universities have all the necessary resources—labo-ratories, equipment, professors, students, etc. Thoseresources were supplemented with physical infrastruc-ture, support programs for innovations, and industryinvolvement in technology commercialization at universi-ties, as well as a high-quality entrepreneurship educationand methods for developing the entrepreneurial culture.

Today, US universities have a distinct system ofpartnership between science, business, government,and sources of capital, clear actions to guide their inno-vation projects and technology commercialization, andinstitutes for training a new generation of technologicalentrepreneurs.

The physical infrastructure as well as the approachesto technology commercialization at US universities isextremely flexible. In figure 1, we present the idealizedprocess of technology commercialization at those insti-tutions. Successful R&D begins the process of commer-cialization. If it results in an invention, the invention ismade known to the university’s technology transfer office(TTO) via a completed information form. An expertfrom the TTO, which coordinates work on the invention,is appointed, and the technology is assessed. If the assess-ment deems that the invention is not commerciallyviable, the invention is sent back to the R&D process forrefinement (if it is not abandoned); if the invention is,on the other hand, judged to be commercially viable,then the assessment determines what kind of IP protec-tion will be sought and if a patent should be applied for,as well as establish the appropriate model of technologi-cal commercialization. Because it costs about $10,000 to$25,000 to patent an invention in the United States, uni-versities patent only commercially advanced inventions.Generally, US universities do not have their own patentexperts and instead hire outside experts, which hasproven to be effective. Experts in TTOs can havea technical or business education, degrees in science,and experience in industry, marketing, and licensingagreements. Thereafter market research is conducted,and a business proposal is prepared. Negotiations with

2


2 Before Bayh-Dole, the United States had no uniform policy regardingpatents and IP rights when it came to universities. Thus, each govern-ment organization had to define its own policy. Generally, the rule wasthat any IP created at a university using public funds belonged initiallyto the US government. Operating under the various agency policies,the government had accumulated in its patent portfolio about thirtythousand patents, of which only about 5% had been licensed; the per-centage of inventions that stemmed from those patents that had foundtheir way into commercial use was even smaller.

companies interested in the new technology begin, andthe commercialization model is completed.

In the United States, there are two basic modelsof technology commercialization:1. License agreement with an existing company that is

interested in a new technology;2. Start-up company using the university’s IP (the uni-

versity can license with an existing company, or witha new company started with a technology license).In both cases, a license agreement between the uni-

versity and an existing or start-up company is con-cluded. According to the license agreement, the licensee(the company that obtained the license) pays the licensor(the university) fixed payments—a royalty. If the licenseagreement is concluded with a start-up company thatcannot afford to pay a royalty, often the universitybecomes the owner of a new company share.

Creating a start-up company at a university hasa number of advantages: a university provides necessaryadministrative and consulting support as well as opportu-nities for raising capital; in addition, a new company canbenefit from the expertise of researchers at a university.

A university’s success at creating a start-up com-pany depends mostly on the level of the inventor’s skilland talent in technological entrepreneurship and hisor her desire to develop a business, an innovative regionalecosystem and the availability of capital, the policy andinstitutional structure of a university, and its intellectualpotential, among others.

According to American practices, 80% of licenseagreements are concluded with a licensee who is familiarto the inventor (professor).3 After signing a licenseagreement, TTOs control and monitor its execution.

The best American practices of licensing in tech-nology commercialization call for the following:4

• Standardizing licensing guidelines (except financial)for exclusive and nonexclusive licenses as well as forpatented and unpatented innovations and other cases.

• Assessing potential licensees for the ability to com-mercialize and develop a specific technology.

• Providing (if possible) nonexclusive rights to thelicensees or providing separate licenses for restrictedareas to ensure ample access to technology.

• Assigning the rights to use the licensed technologyfor non-commercial purposes to the universities (i.e.,education and research).

• Closely monitoring the execution of a license agreement.As an example, we can consider the experience of the

University of Maryland, College Park. The key institutionscontributing to technology commercialization includethe Office of Technology Commercialization (OTC) andthe Maryland Technology Enterprise Institute (MTech).

1.1. Office of Technology Commercialization(OTC)

The main objectives of the OTC are to ensure the tran-sition of IP from the university to industry and businessas well as management and development of an IP portfo-lio. In particular, the functions of the OTC are to assess

www.irex.org • www.usrf.ru3

Alina Ilinova, Kai Duh. Technology Commercialization as the Basis of Entrepreneurial Universities:The US Experience and Possibilities for Russia

3 Office of Technology Commercialization presentation, Universityof Maryland, College Park (http://otc.umd.edu/sites/default/files/documents/about-otc-2010.pdf).

4 Adapted from AUTM (Association of University TechnologyManagers) presentations and materials.

Figure 1: Technology commercialization stages at U.S. universities

Source: Adapted from Office of Technology Commercialization presentation,University of Maryland, College Park

http://otc.umd.edu/sites/default/files/documents/about�otc�2010.pdf

the market potential of inventions, provide lawful protec-tion, control license agreements and their execution, con-trol the proceeds from commercialization, and, if neces-sary, assist in starting a new company on the basis of theuniversity’s IP. The OTC has three main areas in whichit provides its services: Information Science (23% of in-ventions and 37% of licenses in 2012), Life Science (23%of inventions and 50% of licenses in 2012), and PhysicalScience (54% of inventions and 13% of licenses in 2012).5

The main results of the OTC are presented in table 1.The OTC (as well as similar offices at other uni-

versities) generates revenue by licensing intellectualproperty. The royalty income and patent reimbursementare the main income. A large corporation as well asa start-up company can act as a licensee.

Until 2012, about 86% of licenses were concluded witha small business, whereas in 2012 that figure was 69%(according to the Bayh-Dole Act, universities are encour-aged to license inventions to small businesses). In recentyears about 50% (in 2012, 46%) of inventions were fundedwith public money (a percentage that approximately cor-responds to the general tendency around the country).6

The OTC has the following royalty distribution policy:10% of the income received goes to the inventor(s); 30%is paid in university administrative fees. After expenses arecovered, 50% of net revenue goes to the inventor(s) and

50% to the university (of which 85% goes to the inventor’sdepartment and 15% goes toward promoting patents).7

In addition to the quantitative indicators mentionedabove, the success of the office is defined by the develop-ment of research and entrepreneurship at the university,the involvement of talented young scientists, the reputationof the university and its research, and the importance ofthe university’s innovation for the economy and society.

The important component of successful activity ofthe office is the highly qualified and skilled team thatallows it to carry out a technological audit of inventionsand to make reasonable decisions on technology com-mercialization.

1.2. Maryland Technology Enterprise Institute

Mtech’s mission is as follows:8

• Educate the next generation of technology entrepreneurs;

• Create successful technology ventures;

• Connect Maryland companies with university resourcesto help them succeed.

Mtech’s total economic impact since 1985 has beenabout $32.3 billion; about 8,000 direct jobs have beencreated through Mtech programs; and twenty-nineentrepreneurship and innovation courses, as well asa number of successful venture creation programs that

4


5 OTC, University of Maryland, College Park (http://www.otc.umd.edu/about/statistics).6 OTC, University of Maryland, College Park (http://www.otc.umd.edu/about/statistics).

Table 1. OTC Main Results (University of Maryland, College Park)

7 OTC, University of Maryland, College Park (http://otc.umd.edu/sites/default/files/documents/royalty-distribution.pdf).8 Mtech, University of Maryland, College Park (http://www.mtech.umd.edu/).

help entrepreneurs create successful new ventures, havebeen offered by Mtech.9

MIPS (Maryland Industrial Partnerships Program)is one of Mtech’s programs. MIPS fosters academic-industrial partnerships for innovation. Funds from MIPSand Maryland companies go toward accelerating researchand knowledge into products. MIPS is a win-win-win:companies leverage their R&D funding and gain accessto faculty expertise; faculty and students gain funding toengage in commercially relevant research; and the statebenefits via accelerated and increased revenue.10

Since 1987 commercial products benefiting from MIPShave generated more than $28.1 billion in revenue,added thousands of jobs to the region, and contributedto successful products such as Martek Biosciences’nutritional oils, Hughes Communications’ HughesNet™,MedImmune’s Synagis®, and Black & Decker’sBullet® Speed Tip Masonry Drill Bit.11

1.3. Other Technology CommercializationPartners

Technology commercialization at the Universityof Maryland does not happen only through the OTC andMtech. The Center for Advanced Life Cycle Engineering,or CALCE, is a good business model of technologycommercialization. CALCE is funded by over 150 orga-nizations (members) worldwide. All results from the pro-jects are shared among all the members. Members areprovided a free license to all CALCE IP for their inter-nal use only (if they wish to commercialize something,they must negotiate with the University of Maryland forrights). Generally, CALCE does not produce patents oreven licensable technology (produce models and data)—earning revenue via licensing is not central to CALCE’sbusiness model.12

The main tasks of technology commercializationat US universities can be identified as the following:13

• Accelerate the transfer of new technologies fromuniversities to the marketplace.

• Provide services (training, counseling, and mentoring)for university researchers and potential business partners.

• Assess the fair market value of IP owned by the uni-versity, and determine and negotiate fair terms oftransactions and agreements.

• Use best business practices while taking intoaccount the interests of the general public.

• Resolve conflicts among groups of researchers,industrial partners, and the university.

Although some American universities have madegreat progress in technology commercialization andscientific entrepreneurship, there remain a numberof problems. One of the main ones is that inventorsdo not always disclose inventions to their university’soffice of technology commercialization in time, whichcould possibly jeopardize the patent process.

However, as our interviews have shown, inventorsdeem that the rules and regulations imposed by theOTC limit their freedom in scientific research.

Another problem is the fact that universities tendto be excessively decentralized. Too much decentraliza-tion can cause entrepreneurial projects to lose theirintegrity and synergy, and may result in a loss of con-trol over intellectual property. At the same time, uni-versities should not rush to centralize their operationstoo much, as excessive centralization of managementcan constrain initiatives and dampen the entrepreneurialspirit of students and professors.

But despite those problems, technology commercia-lization at US universities has been successful overall.For example, commercialization at the University ofMaryland alone generates around $1 million a year(table 1) for the Office of Technology Commercializa-tion, not to include returns to the various companies.The United States affords an excellent example forcountries such as Russia to follow.

www.irex.org • www.usrf.ru5


docs/mtech_spread_2014.pdf).

12 Presentation about CALCE prepared by Dr. Peter Sandborn,director of Mtech and professor in the Department of MechanicalEngineering, May 2014.

13 Adapted from AUTM and OTC presentations and materials.

9 Mtech, University of Maryland, College Park (http://www.mtech.umd.edu/docs/mtech_spread_2014.pdf).

10 Presentation on the Maryland Industrial Partnerships Program, pre-pared by Joseph Naft, director.

11 Mtech, University of Maryland, College Park (http://www.mtech.umd.edu/

2. Technology Commercializationin Russia

Let us now turn to technology commercialization inRussia. Russia is good at research, and her science andresearch fields remain world class (American Councils forInternational Education 2014). Russian scientists andinventors are known throughout the world. The Russiangovernment has actively financed R&D in recent years:expenses for R&D were 1.48% of GDP in 2013 (seefigure 2), compared with 1.16% of GDP in 2010(UNESCO Institute for Statistics 2012). They are lessthan in the United States (2.66% of GDP in 2013), butfor Russia they are considerable nonetheless, and thepercentage is expected to reach 3% by 2020, according tothe strategy of innovative development of Russia.

But Russia patents a large amount of IP withoutcommercial potential and commercializes only 2.2%of inventions.14 Most Russian R&D is carried out inpublic institutes that have weak commercial ties. Thus,Russia’s biggest deficiencies are technology commer-cialization and practical application of inventions.

There are four main models of technology develop-ment in Russia: (1) government contracts and researchgrants; (2) business contracts; (3) university-basedstart-ups (Federal Law 217 (2009), “Law on SmallEnterprises near Universities”); and (4) licensing.

Russian universities are focused on models 1 and 2of technology development and have historically notbeen concerned about the practical use of scientificresults. But models 3 and 4 are where technology com-mercialization is really at, and they represent newtrends for Russian universities.

Models 3 and 4 demand inventions (IP) with thepotential for commercialization, support organizations(structure) and resources, and the promotion of team(especially model 3) and entrepreneurial skills. Theseaspects are missing at Russian universities. Universitiesare not ready to pursue these models of commerciali-

zation. Therefore it is precisely models 3 and 4 thatneed to be developed.

Technology commercialization in Russia means anyform of commercial usage of IP, including a cession ofthe rights, licensing, and internal use of IP by univer-sities and commercialization by specialized companies.

In Russia, the adoption of Federal Law 217 in 2009,which made possible technology commercializationat universities, has brought Russian universities closerto the model of the entrepreneurial universities onefinds in the United States. Its importance cannot beoverstated. The law allows universities to create smallmedium enterprises (SME). It was passed to supportthe implementation of IP in the production of innova-tions, which in turn was derived from the state budget.

Today, Russian universities have a quite compre-hensive, although far from perfect, institutional frame-work for the involvement of IP in economic circulationand the realization of two main models (as in theUnited States) of technology commercialization.

The implementation of Federal Law 217 is consid-ered to be a difficult process but the range of unre-solved issues is constantly decreasing (in particular, inconnection with Federal Law 273 adopted in 2012,“About Education in the Russian Federation”). It willtake several more years to create a sustainable system.That can be seen from the experience of colleagues inAmerica, where a similar law was adopted but muchearlier (1980).

6


14 The Federal Service for Intellectual Property of Russia (Rospatent),2012 (http://www1.fips.ru/wps/wcm/connect/content_en/en/main+).

Figure 2: Expenses for R&D as a % of GDP, 2013

Source: Global R&В funding forecast 2013, Battelle R&D Magazine

(http://www.battelle.org/docs/default�document�library/

2013�R�and�D�Funding�Forecast.pdf?sfvrsn=4).

3. Russia and the United States:A Comparative Look

Let us now compare the United States and Russia.Table 2 compares the purposes of R&D, technologycommercialization, and patenting in the two countries.

US scientists care about the commercial use of scien-tific results; Russian scientists are interested in sciencefor its own sake, without caring too much if the resultsof their research are useful or practical. We believe thatit is necessary to look for a balance between the prac-tical benefits of science and “pure” science.

We then compared diverse aspects of technologycommercialization at US and Russian universities anddeveloped general recommendations for Russian condi-tions (table 3).

In recent years a number of serious reforms thatchanged the rules of technology commercializationwere carried out in Russia. However, all this was imple-mented in an environment created with outdatedapproaches. Government institutions do not understandthe challenges universities face and the possible conse-quences to universities of legislative changes.

Historically, market relations in Russia did not affectthe process of technology commercialization at the

country’s universities; applied research was conductedgenerally at scientific research institutes; universitiesdid not play major roles in innovative and regionaldevelopment. Therefore, the development of innovationand entrepreneurship, as well as finding an optimumbalance between different types of activities (education,innovation, technology commercialization, entrepreneur-ship, etc.), is far more difficult at Russian universitiesthan at American universities.

State legislative and structural measures in Russiaare generally directed at the creation of innovativephysical infrastructure and the tools of innovation(resources, incubators, science and technology parks,funds), but filling that infrastructure and finding goodprojects to take advantage of those tools remaina problem. Creating such structures and tools alonewill not create the intended effect. Also needed arean innovative competitive environment and an entre-preneurial culture promoting the birth and advanceof ideas and new technologies—two things very poorlydeveloped in Russia. And without them the innovativeecosystem, in particular at universities, will not function.Physical infrastructure and the tools of innovationtogether with an entrepreneurial culture, friendly commu-nications, networking, and mentoring—those make theenvironment effective for technology commercialization.



7

Table 2. The Purposes of R&D, Technology Commercialization, and Patenting at US and Russian Universities

State innovation policy in Russia is more directed atthe implementation of scientific projects at universitiesand the stimulation of inventors and research teamsto find possibilities for technology commercializationindependently. However, the scientist-businessman isa rarity in Russia. Scientists are not particularly skilledat knowing market conditions, cannot determine the

market value of their own inventions, and almostalways cannot turn technology into a saleable product.

For its part, industry is not familiar with the techno-logies developed at universities. Even when an industrialcompany is interested in a university’s technology, theuniversity simply is not ready to work with the company.Generally this is because the university does not under-

8


Table 3. Diverse Aspects of Technology Commercialization at US and Russian Universities and Recommendations for Russia

stand the rules of the game, does not have qualifiedexperts who can manage the dialogue between science andbusiness, and does not have strong project teams capableof “packaging” the innovative project for industry needs.

The Russian government conducts a top-down inno-vation policy: decision-making and the distributionof resources are centralized, and there is a lack of orga-nizational flexibility. The fear of misuse of public fundsblocks initiatives and the flexible adaptation of supportmechanisms. Innovations should not depend on the state;they should be born independently through a bottom-up culture of innovation.

In spite of the fact that a number of importantnormative legal acts regulating innovative activity atuniversities, as well as a number of changes in legisla-tion, have been adopted, university administrators,faculty members, inventors, experts, and students do notunderstand basic concepts of IP protection and usage.

At the leading American universities, promoting IPmanagement and educating key players about it beganin the middle of the twentieth century, long beforeadoption of the Bayh-Dole Act. In Russia, they areonly now beginning.

As noted, the scientific and technical potential ofRussia is huge. The largest companies in the world arevery interested in benefiting from and using innovativeproducts and technologies developed in Russia. But therealization of Russian potential is not a simple matter.One complication holding Russia back is that of trainingtechnology entrepreneurs, project teams, and innovativemanagers at her universities. There is no good businesseducation in Russia. In most cases, faculty membersin business schools have never been in industry and haveno experience with the kinds of projects businesses usu-ally undertake. This gap between science and businesshas affected the quality of teaching and education.

Although difficult, it is possible to raise capital (inviteinvestment) in Russia. Investors around the world wouldrather choose strong teams instead of good (even dis-ruptive) technologies because without a good projectteam, no technology can be used to any great benefit.The problem in Russia is a lack of strong project teamsthat are able to justify an investor’s capital. Trainingof such teams and the development of business skills

have to happen at the universities, which are un-fortunately still a long way away from being able todo those things. And only experts with experiencein entrepreneurship can provide high-quality training.

It is necessary to train not only students in economicand business schools, but also students in technicalschools, because they are future technology entrepreneurswith their ideas and projects. If there is an idea,the student or the university graduate has to knowwhat to do with it. And such initiatives have to receivenew mechanisms of support within universities, includingaccess to capital.

Universities need a stable source of public fundingfor research. The Russian government actively financesand supports the development and advancement ofnew knowledge and technologies (through the RussianHumanitarian Science Foundation, the Russian Founda-tion for Basic Research, Federal Target Programs, theFoundation for Assistance to Small Innovative Enter-prises, Skolkovo, Rusnano, RVC, etc.). The state actsas a so-called “business angel” during the first stagesof innovative projects, helping universities to carry outR&D and to enter the market for private capital.

Universities actively participate in such programs;however, when public financing comes to an end,technologies are not yet ready for the market, theproject team is not ready (or has no desire) to marketIP or start a business; there is no administrative andconsulting support available. Participation in suchprograms becomes an end in itself; further developmentof technologies and the organization of successful newventures happen only in isolated cases. And here iswhere the university can play an important role: it canencourage teams to package innovative products withthe help of departments and centers of technologycommercialization, or universities can arrange for out-side parties (intermediaries) to market those products.

In the modern world of innovations, the conceptof “Open Innovation” (Chesbrough 2003) dominates.The idea and principles of Open Innovation are that intoday’s market and business world, in today’s opencommunity and with transparent processes, nobodycan be successful and prosper on his own. New know-ledge and abilities, experience, contacts, networking, and



9

10


reputation are necessary. The impor-tant part is assigned to innovativemanagers and new players—inter-mediaries in the innovation market.They must perform most of the workand provide most of the services whenit comes to technology commercializa-tion. They are objective owing to theirindependence and are translators in thedialogue between science and business,leveling distinctions between the twoand clearing up misunderstandings.

In Russia such intermediarieshardly ever participate in technologycommercialization, and if they do,they are not trusted. Thus, Russianuniversities hardly ever work withintermediaries, and the failure to doso significantly reduces their successin technology commercialization.

Protection of IP in Russia is a separate issue.The conceptual principles of IP protection wereestablished in Russia with the adoption of the CivilCode of the Russian Federation (part four). The legalfoundation has thus been established; however, theefficiency of the system is far from perfect. IP protectionplays an important role in attracting venture and directinvestments and in developing innovations. Figure 3shows two indexes: that for country attractiveness forinvestments (how attractive a country is to investors)and that for IP rights protection. Russia significantlylags behind many other countries, and that negativelyaffects its investment attractiveness. The United Statesenjoys some of the strongest IP protection and thehighest index of country attractiveness for investments.

Only if IP is well protected is it an asset. Strong protec-tion of IP is a necessary condition of practical applicationand use of new technologies in meeting economic targets.

Patents in Russia have no such protection andthey are not valid as they are in the United States.Unlike in Russia, the process of obtaining a patentin the United States remains extremely difficult,labor-intensive, and expensive. Criteria and requirementsfor obtaining patents are very strict.

In Russia applying for a patent is quite easy; it ispossible to patent practically everything and thusa patent has no value and does not make sense.What Russia needs to do is to develop a system of intel-lectual rights protection, including creating an effectivejudicial system for IP protection and ensuringthat applications for a patent are taken seriously andevaluated thoughtfully.

So, scientific and technical entrepreneurship is a newphenomenon for Russian universities. It demands newstandards of administrative, research, and businessactivity, in particular:

• entrepreneurial behavior, which should be common;

• physical innovative infrastructures and innova-tion tools;

• policies that promote innovation and that culti-vate an entrepreneurial culture;

• flexible management systems;

• a system of human resources management atuniversities and a business network of graduates;

• expertise and skills at marketing products andpredicting what new technologies will be needed;

• two-way communication between universitiesand companies.

Figure 3: Index of IP rights protection and index of country attractiveness for investments

Sources: The Global Competitiveness Report 2013�2014 and the Venture Capital & Private Equity Country Attractiveness Index (http://blog.iese.edu/vcpeindex/).

Note: Index of country attractiveness for investments ranges from 0 to 100;Index of the IP rights protection: 1 = very weak; 7 = very strong


University-industry cooperation also is a majorproblem, and it is actively discussed by Russian andforeign experts. The vital, important links betweenindustry and universities in Russia are really weak.

Universities will not be able to succeed in technologycommercialization without active collaborations withindustry. The basic principles of the university-industrypartnership have to be defined (for instance, obligatoryinvolvement of students and graduate students inresearch, lack of restrictions on the use of scientificresults in further research, etc.). Universities and busi-nesses must be free to determine specific conditionsand ways in which they can cooperate.

At each Russian university the recognition ofa number of barriers—legal, procedural, structural,cultural, social—which prevent a university frombecoming an incubator of innovations is necessary.The understanding of these barriers will allow universi-ties to overcome them and to succeed as a supplier ofhighly qualified specialists and producers of saleable IP.

4. Policy Recommendations

Generalizing from what we have noted above, we canpropose the following policy recommendations forRussian universities:

• Develop an integrated ecosystem, one that bringstogether science, entrepreneurship education, innovation,and collaboration

• Generate IP with commercial potential (real saleableproducts, not products that exist on paper only);analyze, screen, and “package” innovation projects; focuson market research and create a value proposition state-ment. Technology becomes a commercially viableproduct when it solves a specific problem in the realworld; a concept is well developed and a technology isready for industrial use when it is difficult to reproduceand has patent protection.

• Develop an entrepreneurial culture among employeesand students; popularize innovations, and improve IPmanagement and entrepreneurship. Staff and studentsat universities should be encouraged to generate anddevelop new ideas. The current culture of indifference

has to be replaced by business activity and initiative,courage, and a desire to succeed in developing newproducts and bringing them to market.

• Create entrepreneurship education opportunities(programs, speaker series, open hours) to educateinnovators with strong entrepreneurial skills; promotestudent innovation and entrepreneurship; create andtrain project teams and IP managers.

• Involve those with business skills in innovations in IPmanagement and entrepreneurship education.

• Connect with companies to collaboratively useresources and pursue opportunities; facilitate university-industry collaboration; aspire to win-win scenarios(the university and industry benefit); work directly withlocal businesses and communities; focus on the realrequirements of business.

• Weaken centralization, to give freedom to divisionsand the ideas of the young generation.

• Establish American-Russian long-term business relation-ships of interest, benefiting both countries (e.g., EURECA).

For IP management as a main part of technologycommercialization at universities we can proposethe following:

• Publicize research results that have commercialpotential and can be used to benefit the economy andsociety.

• Discourage the premature publication of scientificresults because in this case it will not yield a commer-cially viable product.

• Clarify the particular points of law that relate to IPcreation and use.

• Carry out a full assessment of IP (identify obstaclesto protection and commercialization, commercial oppor-tunities, etc.).

• Provide timely and effective protection of IP inthe appropriate form (patents, know-how, etc.) and IPmanagement.

• Develop a suitable strategy of commercialization byjoint efforts (experts, inventors, and university adminis-trators), establishing terms of concrete actions.

• Provide equitable distribution of economic benefitsfrom IP commercialization, to encourage inventors andto provide cash rewards to all stakeholders.


11

We can propose the following (in our opinion, the mostimportant) policy recommendations for the Russiangovernment:

• Conduct a bottom-up innovation policy.

• Investment in programs that promote a cultural shifttoward entrepreneurship and innovation.

• Invest in human capital for innovation, entrepreneur-ship, and science commercialization.

• Stimulate demand for innovations rather than justemphasize the production of innovative products,tools, and mechanisms.

• Adopt a number of measures and acts for strength-ening IP protection.

Both universities and the government need to placea priority on research results that can have real-world economic effects rather than focusing on merelyinvesting in research.

5. Conclusions

We began this paper by proposing that Russia canbenefit a great deal from the United States when itcomes to technology commercialization. Needless tosay, the way in which US universities have promotedtechnology commercialization cannot be copied detailfor detail, because the situation in Russia is not exactlylike the situation in the United States. We can observethe best practices of US universities, but they cannotbe exactly replicated. It is necessary therefore to createa Russian model of technology commercialization that,while drawing on the spirit and general featuresof technology commercialization in the United States,is adapted for the specific conditions in Russia.

In Russia, research activity is conducted largely with-out a specific goal for commercial use. However, the fol-lowing has to become the rule of any scientist and inven-tor: secure strong legal protection and license an idea(to begin a business) so that others do not begin to use itand do not start earning money from it. Unfortunately,in Russia, there are a lot of cases in which intellectualproperty is appropriated and put to commercial use.It is necessary to understand that the most valuable assetin technology commercialization is well-protected IP.

Technology commercialization is generally not aboutscience; it is about the market, clients, partners, marketing,finance, etc. It is extremely important to keep in mindthe needs of end users of innovative products. And allstakeholders in the technology commercialization processhave to realize that commercialization is not a game of

“what do we have” but one of “what does someone need.”

References

American Councils for International Education. 2014. “AdvancingResearch Universities and Russia in the Innovation Economy.” DraftWhite Paper.

Bremer, Howard W. 1998. University Technology Transfer: Evolution

and Revolution. Council on Government Relations.

Chesbrough, Henry W. 2003. Open Innovation: The New Imperative

for Creating and Profiting from Technology. Cambridge, Mass.:Harvard Business Review Press.

The Global Competitiveness Report, 2013-2014: Full Data Edition.

2013. Geneva: World Economic Forum. http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf.

Shane, Scott. 2004. Academic Entrepreneurship: University Spinoffs

and Wealth Creation. Cheltenham: Edward Elgar.

Speser, Phyllis L. 2006. The Art and Science of Technology Transfer.

Hoboken, N.J.: Wiley.

Tieckelman, R., R. Kordal, and A. Sanga. 2010. AUTM Licensing

Activity Survey FY2008: Survey Summary. Deerfield, Ill.:Association of University Technology Managers.

UNESCO Institute for Statistics. 2012. Research and Development

Expenditure 2010.

Acknowledgements

This paper was made possible by a grant from IREX (the InternationalResearch & Exchanges Board) with funds provided by the U.S. RussiaFoundation for Economic Advancement and the Rule of Law (USRF).The statements made and views expressed are solely the responsibilityof the authors. The authors wish to express gratitude to the followingindividuals for many valuable discussions on this subject: GayatriVarma, Peter Sandborn, Joe Naft, James Green, Craig Dye, and AllaCorey McCoy.

Special thanks to: Adrian Erlinger and Olivia Goldstein, AmericanCouncils for International Education.


The Yegor Gaidar Fellowship Program in Economics is a program of the U.S. Russia Foundation for Economic Advancement and the Rule of Law (USRF)and IREX. The Gaidar Program supports the long�term development of Russia’s market economy by providing opportunities for leading Russian economists and legal experts working in the economic sphere to conduct collaborative research with U.S. economic experts. It is named in honorof Yegor Gaidar, the first Minister of Finance of the Russian Federation. http://www.irex.org/project/yegor�gaidar�fellowship�program�economics.

Documents

Technology Commercialization as the Basis of