Commercialising public research

Commercialising public research: New Trends and Strategies

Directorate for Science, Technology and Industry

Daniel Kupka

Setting the stage

• … is important for generating (more) economic growth and jobs from innovation…

• … and is not easy, as public research and business are two different worlds, with different motives, rules and cultures.

• Commercialisation has been at the centre stage of research policies in OECD countries for 20 to 30 years now (e.g. OECD (2003), Turning Science into

Business) What is it about? Where are we with it? What can we do to foster it?

Commercialising public research

(Simplified) Knowledge transfer and commercialisation system

Public Research Results

IP ProtectionPatentsCopyrightsTrademarksTrade Secrets

BenefitsSocialEconomic Cultural

Invention Disclosure

No invention Disclosure

Evaluation of Invention

Market technology

Joint PublicationsMobility Contract researchFacility sharingConsultancyStart-ups by students and graduatesetc.

Environmental factorse.g. Country's industry characteristics, companies absorptive capacities

Institutional characteristicse.g. University IP policies, Norms, research quality, university culture

Organizational resourcese.g. technology transfer expertise, relationships with companies

Researcher incentives/ characteristicse.g. motivation to disclose/share research results and data

Local and national S&T policies

WHAT DOES THE DATA TELL US? A SNAPSHOT

Invention disclosures relative stable but slight drop after crisis

Source: OECD based on data from Australia’s Department of Innovation, Industry, Science and Research, 2011 and 2012; European Commission, 2012; US Association of University Technology Managers (AUTM), 2008-2012; Canadian AUTM, 2008-2012; HEFCE, 2009-2012

Invention disclosures, 2004-2011Per USD 100m research expenditure

0

10

20

30

40

50

2004 2005 2006 2007 2008 2009 2010 2011

Australia Canada Europe United Kingdom United States

Patents filed by universities, 2001-2005 and 2006-2010Patent applications under Patent Cooperation Treaty (PCT) per billion GDP (Constant 2005 USD (PPP))

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

2006-2010 2001-2005

University patenting has increased for the OECD area in 2001-05, but growth slowed

1. Patent applicant’s names are allocated to institutional sectors using a methodology developed by Eurostat and Katholieke Universiteit Leuven (KUL). Owing to the significant variation in names recorded in patent documents, applicants are misallocated to sectors, thereby introducing biases in the resulting indicator. Only economies having filed for at least 30 patents over the period 2001-2005 or 2006-2010 are included in the Figures.2. Data broken down by priority date and residence of the applicants, using fractional counts.3. Hospitals has been excluded.Source: OECD Patent Database, February 2013.

Average annual growth rates for OECD area (absolute numbers)2001-05: 11.8%2006-10: 1.3%

PRI patenting has increased between 2001-2005, but growth turned negative

0.000

0.050

0.100

0.150

0.200

0.250

2006-2010 2001-2005

Patents filed by public research institutes, 2001-2005 and 2006-2010Patent applications under Patent Cooperation Treaty (PCT) per billion GDP (Constant 2005 USD

(PPP))

1. Patent applicant’s names are allocated to institutional sectors using a methodology developed by Eurostat and Katholieke Universiteit Leuven (KUL). Owing to the significant variation in names recorded in patent documents, applicants are misallocated to sectors, thereby introducing biases in the resulting indicator. Only economies having filed for at least 30 patents over the period 2001-2005 or 2006-2010 are included in the Figures.2. Data broken down by priority date and residence of the applicants, using fractional counts.3. Hospitals has been excluded.Source: OECD Patent Database, February 2013.

Average annual growth rates for OECD area (absolute numbers)2001-05: 5.3%2006-10: -1.5%

Licensing income, 2004-2011As a percentage of research expenditures

In Europe, revenue from licensing is low compared to the US and is not increasing


Spin-off creation is higher in Europe, but little evidence of growth and job effects

Creation of public research spin-offs, 2004-2011Per USD PPP 100m research expenditure


Business-funded R&D in the higher education sector , 2000-2011

Source: OECD, Main Science and Technology Indicators (MSTI) Database

0

2

4

6

8

10

12

14

16

18

Canada Germany France Japan United Kingdom United States Total OECD%

Business-funded R&D in the government sector , 2000-

2011

Source: OECD, Main Science and Technology Indicators (MSTI) DatabaseNo data for US

0

2

4

6

8

10

12

14

Canada Germany FranceJapan United Kingdom Total OECD

%

Co-authored publications can indicate the degree to which business absorbs or integrates public sector knowledge

Industry-science co-publications, 2006-10

% of industry-science co-publications in total research publication output

Source: Centre for Science and Technology Studies (CWTS), Leiden University, using Web of Science (WoS) database.

Mobility of people important for knowledge diffusion and industry’s research productivity

0

10

20

30

40

50

60

70

80

90

Researchers Non-researchers Total%

Source: OECD, Careers of Doctorate Holders Database. www.oecd.org/sti/cdh

Doctorate holders having changed jobs in the last 10 years, 2009 as %

… commercialisation outputs (at least what we can measure on a narrow set of indicators) seems to be levelling off in a number of countries.

• Did we reach an “equilibrium” or a “plateau”, or have institutional and policy strategies changed?

After decades of reform in Europe and emulation of Bayh-Dole around the world ...

• Narrow policy focus on 4 elements:• the natural/physical sciences, • patenting & licensing, • faculty inventors; • little understanding of the broader

determinants (“What should I do with my patents?”)

• Limited evidence and metrics: current metrics just the tip of the iceberg; those available most relevant ones?

• Governance and incentives: Do we have right individual incentives? No integrated national policy approach?

Some observations…

• Mismatch between supply and demand: Firms not always willing (e.g. high transaction and search costs, research not relevant or of low quality) or capable of making use of public research results (e.g. lack of own absorptive capacity)

Some observations…

TRENDS IN STRATEGIES AND POLICIES

A practitioners’ view on the commercialisation of public research

Capacities to link with the external environment

through bridging and intermediary organisations

Legislative and

administrative reforms

Incentives for

collaboration

TTO

Supporting the emergence of

entrepreneurial ideas

• Increased autonomy (i.e. University by-laws) allows to negotiate different IP arrangements

• Encouraging industry engagement through granting “free” of charge licenses on IP rights – e.g. Easy Access Innovation Partnership (Glasgow, Bristol

and King’s College London), University of New South Wales and CERN

• Legislative and administrative procedures targeting research personnel and faculty – Patents and commercialisation in tenure and promotion

decisions in some US and Canadian universities (16 of 64)

– “Student ownership” - University of Missouri

Legislative initiatives related to commercialisation and patenting

• “Grace Period”: trend towards expanding grace periods– Japan (2012): broader scope to include sales, any

exhibitions, press releases, and broadcasting

– Korea (2012): prolonged from six to 12 months

• European Commission’s Recommendation on the management of IP and Code of Practice for universities and other PRIs – Set of general principles and minimum standards for the

management of IP and good practice principles for collaborative and contract research

– June 2012: Guidelines on the management of IP in international research collaborations

Legislative initiatives related to commercialisation and patenting (2)

• Technology Transfer Offices (TTOs) have expanded their missions

• Convergence across countries towards a common set of organisational and financial models

• New bridging and intermediation structures– e.g. Innovation offices programme in Sweden

• Replacing or improving TTO structures – Technology Transfer Alliances (e.g. Innovation Transfer

Network (ITN) in the US, SATT in France, cTTO in Ireland, Regional Patent Agencies (RPAs) in Germany)

– For-profit models

– Internet-based models (e.g. Flintbox at University of British Columbia, “iBridge network”)

– Free Agency model (theoretical)

Intermediaries and bridging institutions

• Easing access to patent portfolios for start-ups and SMEs – issue of “sleeping” patents – e.g. US DOEs Next Top Innovator, France´s CNRS PR2 –

Enhanced Partnership SME Research

• IP sharing agreements – e.g. UK’s Lambert Toolkit, Germany´s Model R&D

cooperative Agreements, Denmark´s Schlüter model Agreements

• Patent funds for SMEs and PROs – e.g. Japan’s Life Sciences IP Platform Fund, France’s

Brevets, Korea’s IP cube partners, discussions for an “European Patent Fund”

Collaborative IP tools and funds

• Requirement to publish in digital format – National: e.g. Spain (2011 Science, Technology and

Innovation Law), New Zealand, US, Estonia)

– Institutional: e.g. US National Institutes of Health (NIH), Canadian Institutes of Health Research (CIHR)

Promoting Openness in Science

Spain: 2011 Science, Technology and Innovation Law, art. 37

The research staff whose research activity is financed largely with funds from the State Budget will issue a digital version of the final version of the contents which have been accepted for publication in research journals or periodicals serial as soon as possible but not later than twelve months after the official date of publication.

• Requirement to publish in digital format – Institutional: e.g. US National Institutes of Health (NIH),

Canadian Institutes of Health Research (CIHR)

– National: e.g. Spain (2011 Science, Technology and Innovation Law), New Zealand, US, Estonia)

• Building knowledge repositories– e.g. EC: Digital Repository Infrastructure Vision for

European Research (DRIVER), Open Access Infrastructure for Research in Europe (OpenAIRE), etc.

• New co-operative models– e.g. Lund University, the National Library of Sweden and

Nordbib to adopt online guides to open access journals publishing

Promoting Openness in Science

Supporting the emergence of entrepreneurial ideas form public research

Financing tools for different stages of research commercialisation

Financing (national level)

• Rise in specific financial schemes – Public support shifted from seed funding to the proof-

of-concept (PoC) stage and funding for prototype development

Financing (institutional level)

• Setting up of own PoC and seed funds– In Europe, 73 university and PRIs oriented seed funds

and 48 PoC funds

– Wide heterogeneity in terms of how they function, governance and business models

– Some funds also share features with private-sector patent and IP funds (e.g. Karolinska Development Fund)

Supporting the emergence of entrepreneurial ideas form public research

Source: European Investment Fund Presentation, April 2013

• Lessening the burdens for spin-offs to license-in university technology– equity shares or shares of future revenues; Patent

assistance programmes

• Crowd funding – hype or reality?– University of Utah’s TTO entered in 2013 an exclusive

agreement with crowdfunding platform RocketHub

• Corporate venturing (joint venturing, acquisitions and corporate venture capital (CVC)) – Recent years have seen an increase in corporate

venturing activities

– e.g. Qualcomm’s IP investment programme

Supporting the emergence of entrepreneurial ideas form public research (2)

Qualcomm’s IP investment programme

Source: Qualcomm Presentation

IMPLICATIONS AND CHALLENGES

• Tailoring national policies or strategies is inherently complex

• Policy goals will differ according to countries’ public research environments– Academic excellence and commercial success are

mutually reinforcing (“A rising tide lifts all boats”)

– Countries on the research frontier may be most interested to increase firms’ absorptive capacity, while those further behind the research frontier may seek to reduce undesirable duplication of investment

Implications and Challenges: National S&T Policy

• The major channel for knowledge transfer remains the placement of students

• Those who generate ideas and inventions (i.e. from professors to students), have relevant incentives • Change in incentive structures with agencies and

ministries in charge of academic incentives

• Government oversight of academic incentives could help here to remedy imbalances and conflicts

Implications and Challenges: National S&T Policy (2)

• Allow the potential for commercialisation while retaining the fundamental integrity of the research apparatus– Few universities give a clear policy mandate to

innovation, IP and entrepreneurial strategies

– Top-performing institutions are already learning how to operate broad commercial activities without undermining the integrity of core commitments (research and education)

• Attempt (and experiment) to organise relationships with industry in new ways

• Collaborative and contractual research and professional services are financially more important than patent licensing– they ensure also that needs of industry are well

integrated in the research agenda of the university

Implications and Challenges: Management of Universities and PRIs

• IP is still the foundation (“grammar”) on which new forms of transfer and exchange are happening – How to implement strategies and policies that

recognise different pathways and to link teaching, research and commercialisation without creating undue burdens to the research apparatus?

– Patents and commercialisation in tenure and promotion decisions?

• Rise of open access publishing – shifting of costs from the reader to the author and

institution -> undesirable esp. for smaller universities with high proportion of publishing researchers

– How does it affect negotiations with industry?

Implications and Challenges: Management of Universities and PRIs (2)

• IF NOT (enough) research activity and quality, a TTO is NOT necessary

• Alternative solutions: – Joint TTO services – Technical support services offered by govt.

institutions and TTO Networks– Private counseling


• Students and alumni are usually better entrepreneurs than professional researchers: need to develop an entrepreneurial spirit among students – Institutional co-financed student clubs?

• How to create a eco-system for student and academic entrepreneurs when favourable local conditions are not present? – Smart programme design?

– Creating “Centres of Excellence” for certain disciplines to attract talent, industry and star scientists (and hence capital)?

• Where do get the funding (e.g. POC funds) in times of increased competition and diminished research funding?


• Alternative models of technology transfer the road to heaven? No one-size-fits-all– Emulating national “best practice” models usually

backfire

• Given tightening budgets, will we see an increased consolidation of TTO services towards hub-and spoke and for-profit models?

• Focus of TTOs on generating income through licensing: Certain universities (in the US) have adopted aggressive strategies vis-à-vis business (“troll-like”)– With dubious social return; business can retaliate,

reducing overall impact (e.g. student placement, contract research)

– A risk elsewhere? Denmark: Science Ventures are for-profit. France: The SATT should generate positive net-income in ten years time

Implications and challenges: TTOs

Tech company stopped graduate recruitment following patent infringement

Source: www.patentlyo.com

• Encourage to disclose research results that can be accessed, used and reused by future researchers as well as by TTOs and industry

• Designing incentives to encourage data and invention disclosure is a difficult undertaking – Policy makers, agencies and TTOs need to take

into account a range of variables and interests – Monetary incentives to researchers entail also

risks!

• How to create a more explicit link between the effort that is required to manage and share data and research results and career recognition and rewards?

• no standard for the citation of data

Implications and Challenges: Researchers

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www.oecd.org/sti/innovation

Thank you!

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