Creating a University Ecosystem to Accelerate Commercialization
& Energize Startups
Collaborative Initiatives SymposiumMayaguez, Puerto Rico
19 October 2012
Diane Palmintera, PresidentInnovation Associates
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GOOGLE GROUPON
SUN MICROSYSTEMS
SILICON GRAPHICS NETSCAPE
CISCO SYSTEMS BIOGEN YAHOO
LYCOS MAPINFO
What do all these companies have in common?
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Associateswww.InnovationAssociates.us
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They are all spinoffs from universities
The universities created
an internal and external ecosystem
that promoted technology transfer,
commercialization, entrepreneurship
and economic development.
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Commercialization activities at U.S. universities have sky- rocketed
From FY1996-2011, U.S. universities and research
institutes:
More than tripled the number of active licenses.
More than doubled the number of licenses
executed each year; in 2011, there were 4,899
licenses executed, up 14% from the previous year.
And 591 new commercial products were
created.
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Startups at U.S. universities are rapidly increasing
From FY1996-2011, universities more than tripled the
number of startups launched each year.
In FY 2011, there were 671 startups formed (of
institutions reporting to the AUTM survey).
Almost three-fourths of the startups had their primary
place of business in the licensing institution’s
home state.
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Startups are of growing importance as an economic development tool
Startups represent a growing share of university
commercialization activities.
Startups stemming from formal technology transfer
activities represent only a small portion of the
total enterprises spinning off from academic
institutions. Facebook and Google are good
examples.
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Why are startups an important economic development strategy?
Startups are more likely than licenses to
corporations to remain in the community.
The extent to which startups remain in the
community depends on many factors including
the regional ecoystem, personal ties to the
community, access to capitalization, proximity to
potential customers, and others.
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Valley of Death (courtesy: U.S. DoE)
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Why is the Valley of Death important?
Lack of early-stage capital – increasingly risk-
adverse, and geographically concentrated VC &
angel investments.
Lack of staged investment capital.
Often insufficient understanding and capacity to
build business management.
Critical time lapses between idea and
commercialization when sufficient resources are
not available.
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University commercialization as an economic development strategy
Academic institutions increasingly anchor
economic development in communities and
regions.
Knight/Gallup “Soul of the Communities” survey
shows that universities are important in creating
community ties.
Policy makers and community leaders are
increasingly viewing academic institutions as a
source of entrepreneurs and economic growth.
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University commercialization as an economic development strategy (cont’d)
Spinoffs are more likely to remain in the community
where there is an active entrepreneurial
ecosystem.
University commercialization and entrepreneurship
are not just for the “big and famous”
institutions. University of Northern Iowa, Brigham
Young U., Rensselaer Polytechnic, and the University
of Akron are actively developing startups.
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Community Colleges are engaged in entrepreneurship
Community colleges are increasingly engaged in
entrepreneurial development and startups creation,
and are actively developing linkages with
research universities.
Ivy Tech in Indiana and Loraine County Community
College (LCCC) in Ohio have created workforce and
entrepreneurship linkages with research universities,
and LCCC has a nationally recognized seed fund for
entrepreneurs.
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Many universities successful in spinning off startups have
identified and targeted core research strengths, and
developed strategic plans to build and leverage
those core strengths.
This is particularly important for universities that have
modest research expenditures. Universities such as
Brigham Young U., U. of Akron (polymers), and
Rensselaer Polytechnic Institute (engineering) have been
successful despite modest budgets.
Successful tech transfer and entrepreneurial outcomes are built on substantial, excellent and focused research
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Multiple internal factors affect the institution’s success in technology transfer and entrepreneurship
Leadership from the university president is often seen in
universities successful in technology transfer (T2).
Hiring and reward systems, especially tenure credit for
T2, impacts the “entrepreneurial culture” and related
outcomes.
Universities that are responsive to corporate differences
in missions, timeframes and communication styles are
more likely to have successful T2 outcomes.
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Building solid, on-going relationships between
universities and corporations is more productive than
focusing on short-term licensing gains.
Positive corporate relationships can benefit the
university through contributions that may be
substantially higher than licensing revenue.
Internal factors that affect success (cont’d)
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Administrative structure – A separate non-profit
organization, such as a research foundation, can provide
an arms length legal distance that benefits the university
and tech transfer.
Tech Transfer is a “Contact Sport” – Software and
other tech transfer tools help support collection and
processing of invention disclosures, legal and
management processes but do not replace personal
contact and the face time needed with researchers.
Internal factors that affect success (cont’d)
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Entrepreneurial-engaged universities provide or facilitate access to a full range of services
Successful universities understand that engineers and
scientists often make poor business people and
address this weakness.
Successful universities provide, or facilitate access to
capital, build management capacity, accelerate
innovations, incubate entrepreneurs and support
networking.
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Successful entrepreneurial universities have close
linkages to private seed/venture capital. They
facilitate linkages between researchers and startups,
early in the process.
An increasing number of universities have internal seed
capital funds and angel networks that invest in
faculty/student entrepreneurs. Effective funds not only
provide capital but also build management capacity.
Accessing capital
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Entrepreneurial universities sponsor or encourage
linkages to enterprise forums or springboards that
screen, mentor and showcase promising academic
entrepreneurs to potential investors. (MIT Enterprise
Forum one of the first.)
Alumni networks often provide a good source of
angels, mentors and “Fellows” – a surprising number
want to “give back.”
Accessing capital (cont’d)
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Often the major weakness of university startups is
inexperienced management. Hiring experienced
CEO’s and other top managers and providing
experienced management advice can be key.
Entrepreneurs-in-residence and mentors,
especially experienced serial entrepreneurs, provide
invaluable input and guidance to startups.
Building management capacity
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Business plan competitions mentor and showcase
university entrepreneurs to potential investors. Their
value comes more from mentoring than financial
rewards.
Business School/Entrepreneurial Center/Law School
student interns and teams can address marketing,
intellectual property and business issues, benefitting
both startups and students.
Building management capacity (cont’d)
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Acceleration funds/programs are increasing. These
programs such as VentureLab, MIT Deshpande and
USC Stevens Institute provide funding and help move
research from an idea to a commercialization stage.
Challenge grants that require or encourage
university-industry partnerships and commercialization
plans facilitate research translation to the market.
Accelerating innovations
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Critically important are industry involvement
and university-industry partnerships of all types,
including:
Industry participation on academic boards,
Faculty/researcher exchanges and student internships,
Corporate research laboratory and/or incubation facilities on university premise,
Corporate data centers, and
Shared research & production facilities.
Accelerating innovations (cont’d)
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Increasingly inter-disciplinary research and
acceleration programs contribute to innovative
startups.
Creating solid connections with external sources
for beta testing and clinical trials are important
linkages to establish.
Developing student teams to move the innovation to
prototype stage and beyond provide invaluable
learning experiences as well as acceleration.
Accelerating innovations (cont’d)
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Effective incubators and research parks provide a
platform for entrepreneurial services beyond
the physical infrastructure. Venue counts; services
and external connections count more.
Research parks that effectively support
entrepreneurs develop linkages to the
university and to external sources of funding
and business assistance. A good example is
UWisc-Madison.
Incubating startups
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Networking opportunities may be the most
important element. They should facilitate interaction
between entrepreneurs, and between entrepreneurs
and
Service providers,
Potential investors,
Potential partners, and
Customers – private, govt. procurement, and global.
Networking
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Internally – R&D, entrepreneurship programs,
capitalization, acceleration, incubation and
networking should be connected within the
institution.
Externally – Between the institutional innovation and
entrepreneurship operations and local, state and
private ones.
Connecting the dots
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Regionally – Across borders; dictated by natural
growth of clusters and entrepreneurial activities, not
by artificial geographic or political boundaries.
Globally – Connections dictated by potential
benefit from R&D collaboration, production, and
outreach to customer base.
Connecting the dots (cont’d)
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University commercialization is part of a larger regional ecosystem
Courtesy of the University of Akron Research Foundation
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From Core Capacity to Regional Impact
Initiatives• Tech Transfer &
Commercialization• SBIR/STTR & Other
Grant/Contract Assist.
•Mentoring• Investment Capital• Student Internships• Entrepreneurial &
Mgt. Capacity Building
• University-Industry Partnerships
• Univ.-Govt/ Philan. Partnerships
Impact• Startups Launched• High Wage Jobs
Created & Retained• Increased Revenue• Increased Mfg. &
Production• Increased Exports• Diversification • Expanded Supply
Chain • Mushrooming
Cluster Development
• Greater Community Ties & Satisfaction
Core Capacity• R&D Funding &
Expenditures• Science,
Engineering & Medicine Faculty & Students
• Inter-Disciplinary Research
• Research Centers• Laboratory
Facilities• Corporate
Linkages• Physical Infra-
tructure
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Coulter Translational Research in Biomedical Engineering now has transitioned to TP2 involving 6 universities (in addition to first 9).
Increasing collaborations between biomedical engineers and clinicians, moving promising technologies to clinical application, and developing sustainable processes.
$580,000 each year for a period of five years.
Oversight Committee includes the BME Dept. Chair, Medical School reps, OTT, entrepreneurs, local Venture Capital, and the Business school.
National Translational & Entrepreneurship Models
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Deshpande Center:
Since 2002, MIT’s Deshpande Center funded 90+ projects with over $11 M in grants, spinning out 26 projects that collectively raised over $350 M in outside financing.
The Deshpande Center employs several approaches:
• Grant Program – up to $250,000 for projects that have established proof of concept and identified an R&D path and IP strategy.
National Translational & Entrepreneurship Models (cont’d)
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Deshpande Center (cont.’ed):
• Catalyst Program – Catalysts, a vetted group of individuals with experience in innovation, commercialization, and entrepreneurship work with faculty.
• Innovation Teams (i-Teams) – student interns work in teams to develop “go-to-market” technical & business strategies.
• Events – The IdeaStream Symposium and other events showcase MIT technology, and engage the VC and business community.
National Translational & Entrepreneurship Models (cont’d)
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Blackstone “Launchpad”:
Opened in 2008 as part of the University of Miami Career Center, Launchpad treats entrepreneurship as a “career path,” offering guidance and resources through individual and group consultative sessions, workshops, and networking events.
Local Venture Coaches play a key advisory role.
Blackstone expanded the model to Wayne State U. and later a Northeast Ohio consortium; a new initiative of $50 million over 5 years (to start Dec. 2012) will further expand innovative entrepreneurial models.
National Acceleration & Entrepreneurship Models (cont’d)
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National Science Foundation’s “I-Corps”:
NSF selected universities to develop and serve as hubs to conduct entrepreneurial training for science & engineering faculty, involving intense five-day sessions.
Now hosted by Georgia Tech, Stanford, and University of Michigan; a recent solicitation will result in several additional university hubs.
Additional current solicitation will result in smaller entrepreneurial nodes.
National Acceleration & Entrepreneurial Models (cont’d)
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I-6 program:
Created by multiple agencies, lead by EDA, i-6 is intended to bring together multiple, public-private partners to identify a current or persistent problem or unaddressed opportunity, and implement innovative strategies.
Started in 2010 with six awards, two subsequent rounds in 2011-2012 have focused on energy & manufacturing.
National Acceleration & Entrepreneurial Models (cont’d)
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Jobs & Innovation Accelerator Challenge:
A joint program by EDA, DoL/ETA, and SBA, is designed to generate startups and jobs through collaborative, cluster-based regional development. Most involve accelerating ideas to near-production or pilot-production prototypes in cluster driven industries.
To date, two rounds have awarded about 40 regions grants averaging $1.8 million that have targeted industries, including health care, energy, advanced manufacturing, and information technology.
National Acceleration & Entrepreneurial Models (cont’d)
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National Network of Manufacturing Innovation Institutes (NNMII):
Proposed $1 billion public-private partnerships involving regional initiatives that bring together universities, corporations, manufacturers, entrepreneurs, workforce development, & investment vehicles for collaborative R&D, acceleration, and startups.
National Additive Manufacturing Innovation Institute (NAMII), a $70 million public-private pilot was awarded by DoD & DoC in August 2012 to a consortium involving PA, Northeast Ohio, & WVA.
National Acceleration & Entrepreneurial Models (cont’d)
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Checklist for Academic Institutions[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]
Has the institution identified core research strengths and does the institution have a strategy for building its research base?
Is the institution’s president supportive of technology transfer, entrepreneurship and economic development; and is that support demonstrated in academic policies?
Is there “buy-in” from academic deans and faculty researchers; are there sufficient incentives to encourage “buy-in”?
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Checklist for Academic Institutions (cont’d)[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]
Does the institution have sufficient funding and staff devoted to transfer, entrepreneurship and economic development?
Do the institution’s hiring, promotion (tenure) and intellectual property policies encourage faculty participation and promote excellence in technology transfer and entrepreneurship?
Does the institution have the infrastructure and services, and/or linkages with external resources to launch startups?
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Checklist for Academic Institutions (cont’d)[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]
Does the institution have an “entrepreneurial culture;” does it celebrate and reward entrepreneurial success?
Are there effective research and commercialization relationships with industry; and is there sufficient flexibility and responsiveness to benefit both parties?
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Checklist for Academic Institutions (cont’d)[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]
Do the institution’s policies and practices promote long-term benefits rather than short-term technology transfer gains?
Are academic administrators aware of the benefits derived from engaging in technology transfer and entrepreneurial activities?
Are state policy makers aware of the benefits?
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Checklist for Academic Institutions (cont’d)[Excerpted/Paraphrased from Technology Transfer & Commercialization Partnerships ©]
Does the institution work with policy makers and organizations to develop and advocate for comprehensive strategies that support
Research & development funding,
Industry-university partnerships, and
Technology transfer and commercialization, and
Entrepreneurship?
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Two IA reports are particularly relevant from
www.InnovationAssociates.us:
Technology Transfer & Commercialization Partnerships : Sponsored by the U.S. National Science Foundation (NSF), focuses on top emerging, smaller institutions.
Accelerating Economic Development through University Technology Transfer: Sponsored by the CT Governor’s Competitiveness Council, focuses on U.S. top performing institutions in technology transfer.
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Emerging Issues & Recommendations for Technology Transfer and Commercialization in a Global Manufacturing Environment : With the Council on Competitiveness and University of Akron
Developing High-Tech Communities: San Diego: Sponsored by the U.S. Small Business Administration
Other Helpful Publications from IA’s Website:
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INNOVATION ASSOCIATESEmail: [email protected]
Web: www.InnovationAssociates.us
+1.703.925.9402