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Assessment Transfer Technology document sample
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November 2001
ASSESSMENT OF
TECHNOLOGY TRANSFER
At Michigan's Public Universities
The Partnership for Economic Progress, a collaborative initiative of the
Michigan Economic Development Corporation and the Presidents Council, State Universities of Michigan
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
The Michigan Economic Development
Corporation formed a
partnership with the Presidents
Council, State Universities of Michigan
called the Partnership for Economic
B AC K G R O U N D
Progress. The focus of the Partnership
is to promote initiatives that boost
Federal legislation that allowed universities to retain title to inven-
entrepreneurial activity and technology tions developed under federally funded research programs and
transfer. A university benchmarking encouraged universities to collaborate with industry to promote the
report was produced to identify utilization of these inventions has effectively increased technology
commercialization and economic growth. According to the
current levels of achievement by
Association of University Technology Managers (AUTM), between
Michigan universities toward these 1991 and 1999, a review of data from a subset of the US universities
goals. The average Michigan university provided every year since 1991 shows that the number of invention
disclosures at US universities increased by 63%. New patent applica-
tracks or closely approaches the
tions for these universities increased by 198% for this same period,
national average on Association of reflecting an average annual rate increase of 15%. Licenses climbed by
University Technology Managers 133% at an average annual rate increase of 11%. AUTM reported over
statistics that most closely define 417 new products were introduced in 1999. At least 344 new compa-
nies, based on academic discovery, were formed in 1999. 82% of these
economic development measures.
new companies were created in the state of the academic institution
However, the average Michigan that licensed the technology. AUTM estimated that $40 billion and
university falls short of the best-in- 270,000 jobs were supported by the commercialization of university
inventions during 1999. The business activity associated with sales of
class national universities. Reviewing
product is estimated to generate about $5 billion in US tax revenues
the best-in-class university activities at the federal, state, and local levels.1
resulted in the identification of four
areas that could promote In addition, there are now more than 200 universities engaged in
technology transfer, eight times more than in 1980. More than 1,900
economic growth in Michigan.
companies have been formed through licensing activity since the
The four areas are: inception of the Bayh-Dole Act. A recent study of patent applications
s Superior Students/Faculty shows that 73% of prior articles cited in patents come from publicly
funded research. M.I.T., in a study measuring the economic impact of
s Commercialization Activity
university licensing, reported that licensee companies invested an
s Entrepreneurial Support estimated $4.5 billion prior to sales to bring inventions to market.
s Entrepreneurial Infrastructure Also, in a recent study by the Pharmaceutical Research and
Manufacturers of America, it was estimated that about 20% of a com-
pany’s discovery budget will go into external funding, up from 4% in
1994. Collaborations, alliances, joint ventures with universities, labs,
and industry stimulate this growth.2
Universities across the nation are also expanding their outreach
beyond technology transfer to support economic growth. Examples
of this economic development include enterprise institutes, executive
education, collaborative research, partnerships, and technology
parks.
1
M I C H I G A N B AC K G R O U N D
The Governor’s Innovation Forum, a year–long Over the last two years, the Michigan Economic
initiative in 1999, examined the relationship between Development Corporation (MEDC) has aggressively
Michigan’s universities and industries with the goal of focused on implementing these recommendations and
fostering collaboration to the development, attrac- other initiatives to promote economic growth through
tion, and expansion of new business in the state and strong university business partnerships.
the creation of new jobs for Michigan’s citizens.
These activities include:
The following recommendations were made: s Establish an Emerging Business Sectors busi-
s Establish a venture capital fund for university- ness unit within the MEDC to promote growth
spawned start-ups in the advanced manufacturing, information
s Expand/improve angel investor network technology and life sciences sectors
s Increase university patent and license pro- s Administration of the $1 billion Michigan Life
cessing capacity Sciences Corridor Initiative
s Develop standard research and license agree- s Hire a full-time Director of University
ments that universities may use to simplify Economic Development Partnerships
negotiations with industry s Attract Michigan’s largest venture capital fund
s Establish technology transfer policies and pro- ($200 million+) and help raise Michigan’s
cedures that improve turnaround time for deci- overall venture capital
sions about accepting or declining disclosed s Form a statewide Angel Investors Network
inventions s Document Michigan’s retention of 79% of its
s Facilitate compliance with conflict-of-interest high-tech college graduates
policies by coordinating the numerous policies s Finance a $3 million Emerging Technology
governing faculty and student research and Challenge Fund
technology transfer activities and setting up s Fund additional tech transfer staff at Mich-
readily accessible procedures for compliance igan’s research universities
s Encourage student and young alumni entre- s Es ta b l i s h a s ta t e w i d e n e t w o r k o f 1 1
preneurship through technology transfer SmartZonesSM to cluster high-tech start-ups
office services and education and companies by providing special services
s Create incentives at the department and uni- such as incubators, high-speed telecommuni-
versity level for campus researchers to be cations, and financal support
involved with technology transfer activities s Testify before the state legislature in support
s Create a Michigan technology transfer support of an expanded role for higher education in
organization, with the State and Michigan economic development
research universities as members, to promote s Host the first in an annual series of tech trans-
rapid deployment of select technologies into fer workshops and higher education economic
Michigan-based businesses; this would sup- development summits
plement university assessment and marketing
efforts and facilitate pooling of university Many of these initiatives are coordinated by a partner-
technologies ship formed between the MEDC and the Presidents
s Create an entrepreneur host program that
Council, State Universities of Michigan called the
matches large companies with new start-ups Partnership for Economic Progress. The focus of the
s Create more incubator-type facilities; not nec-
Partnership is to promote initiatives that boost entre-
essarily traditional incubators, but areas with
preneurial activity and technology transfer.
geographic proximity to build critical mass of
activity
2
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
B E N C H M A R K I N G R E P O R T
To promote technology transfer, the Partnership Disclosures per $10 Million in Research Expenditures,
developed baseline information on tech transfer activ- Licenses & Options Yielding License Income, License
ities. The University Benchmarking Report compares Income Received, Licenses per $10 Million in
the performance of Michigan universities against the Research Expenditures, Start-ups per $10 Million in
national average and against universities considered Research Expenditures, Number of Start-ups, percent-
best-in-class. The performance is measured by using age of Disclosures Converted to Licenses, and per-
AUTM statistics. The most current data available is centage of Disclosures Converted to Start-ups.
for 1999. Although AUTM reports many statistics, the
University Benchmarking Report includes only statis- Six universities (University of California, Columbia
tics or measurements that best measure the technolo- University, Stanford University, MIT, University of
gy commercialization and economic development Wisconsin, and University of Washington) had the
activities of the universities. These measurements highest rank in both lists and are defined for the pur-
include Total Sponsored Research Expenditures, pose of this study as best-in-class.
Industry Sponsored Research Expenditures,
s The University of California has nine campuses although two-thirds of the $74 mil-
lion in licensing revenues comes from patents issued to the University of California at
San Francisco, School of Medicine. The University of California at San Francisco is
the only campus of UC dedicated solely to graduate and professional study in health
sciences. Part of the University of California since 1873, UCSF is a campus known for
its scientific discoveries, teaching prowess and patient care.
s In 1982 Columbia University founded one of the first university technology transfer
offices set up after passage of the Bayh-Dole Act. The tech transfer organizations set
up by Columbia provides the resources to evaluate new business opportunities and
works with faculty members, venture capital groups, and industry to start new com-
panies or businesses based on Columbia intellectual property. The office also serves
as the starting point for venture capital firms and other companies that are interest-
ed in learning about Columbia technologies that can serve as the base technology for
a new start-up or business. 3
s Massachusetts Institute of Technology (M.I.T.) attributes it’s success to several ini-
tiatives including a wealth of good technology coming from investigators and the
entrepreneurial spirit among the faculty, clear policies well thought out and consis-
tently applied, enthusiastic support from the upper administration of M.I.T. who are
committed to technology transfer, a highly simplified invention disclosure and
reviewing process, lowering the barriers for investigators to submit inventions, and a
staff of technically trained, industrially experienced licensing officers who under-
stand both academia and industry and who get a great deal of satisfaction from get-
ting the deal done — within university policy. Straightforward licensing procedures
and the ability to commit at the negotiation table also contribute to the success of the
program. Most agreements can be signed in the Technology Licensing Office without
further review. The Cambridge/Boston area start-up companies benefit from the
presence of a large number of seed-stage venture capital firms, numerous consultants
and experienced executives, hundreds of role models, local incubators, and a number
of venture forums and related business networking clubs, including the M.I.T.
3
Enterprise Forum. The M.I.T. Technology Licensing Office cannot take credit for
these, but is a good source of introductions.4
s Stanford operates on the belief that successful licensing hinges on the successful mar-
keting of inventions, while patenting and administrative functions can be effectively
handled by outside patent attorneys and support staff. Their licensing associates have
degrees in science or engineering, as well as some industry experience in marketing
and prior licensing experience. Licensing associates at Stanford are assigned complete
responsibility for specific inventions, subject only to general guidelines and policies.
Stanford believes that such decentralization of the decision-making process is a crit-
ical component of successful technology licensing. 5
s The University of Wisconsin-Madison has been licensing patents from its research
since 1925, when dairy scientist Harry Steenbock discovered an irridation process
that could activate vitamin D in milk. In 1995 invention of immortalized embryonic
stem cells created much publicity. The Wisconsin Alumni Research Foundation
(WARF) handles the school’s patent and license affairs. Through WARF trustees, a
1931 endowment of $400,000 and current licensing income has become a portfolio of
balanced assets capable of producing over $19 million in annual gifts to support UW-
Madison research. WARF's endowment principal is virtually never touched. WARF's
annual grant to the University, accounts for approximately cve percent of the
University’s annual research budget. However, it is the flexible no strings attached
nature of the WARF funds limited only by the specification for scientific investiga-
tion, that makes them so valuable in building and strengthening the UW-Madison as
a world-class university. Former UW Chancellor Edwin Young stated, “The
University is constantly aware of the extra dimension of quality that WARF funds
provide.” The University of Wisconsin also has access to the University Research
Park, a non-profit separate entity that provides state-of-the-art facilities to both spin-
off and other start-up firms.
s The University of Washington has many initiatives devoted to promoting entrepre-
neurial activity. The UW is developing a new institute for nurturing the creation of
companies that will take UW-developed technologies to market, at the same time
providing a real-world laboratory for students and faculty to study the process of busi-
ness formation. The intention is to build an institute that not only helps to create
new technology enterprises, which are the cornerstone of the 21st century economy,
but also seeks to understand them. The University of Washington believes that inno-
vative collaborations between the university and industry, accompanied by new
approaches to education, can extend the research, enhance the instructional mission,
and significantly contribute to regional economic development. As part of the insti-
tute, the UW is creating a technology facility and commercialization center, or incu-
bator, to assist start-up companies in bringing UW technologies to the marketplace.
The incubator will house fledging companies, joint UW-industry projects, and
Technology Enterprise Institute programs and services. The incubator will provide a
framework for the technology transfer process and a place for venture capitalists and
4
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
angels to interact with entrepreneurs; it will also provide a range of business services
and policy analysis. Student internships will thus provide undergraduates and gradu-
ate students with real-world learning experiences. The institute is structured to
provide a learning and research environment for students and faculty from UW, who
will both facilitate and study the commercialization process itself. Among its other
schools and colleges, the School of Law, the Business School, the College of
Engineering, and UW Educational Outreach will be particularly involved in this
effort, as the institute becomes a laboratory for students and faculty studying the
commercialization process. Students will be involved in performing market analyses,
developing business plans, and researching intellectual property issues.
5
The Michigan universities benchmarked are highlighted in the lists, as well as best-in-class peers. The average of
the Michigan universities for Licenses and Options Yielding License Income approaches the national average while
the University of Michigan ranks 18TH, Michigan State University ranks 35TH, Michigan Technological University
ranks 78TH and Wayne State University ranks 91ST. MSU ranks 7TH in Adjusted Gross License Income Received due
to patents awarded Barnett Rosenberg for the anticancer drugs cisplatin and carboplatin.
Universities Ranked By Number of
Licenses Yielding Income
Licenses and Options
Yielding License Income Rank
Univ. of CA 715 1
MIT 346 2
Stanford 339 3
Iowa State 298 4
Columbia 212 5
Purdue 201 6
Cornell 199 7
Univ. of Wisconsin - Mad. 191 8
Univ. of Washington 185 9
Harvard 166 10
Texas A&M 155 11
Univ. of Minnesota 153 12
SUNY Research 149 13
Johns Hopkins 137 14
Baylor College of Med 110 15
Univ. of Maryland/College Park 109 16
Washington University 107 17
Univ. of Michigan 90 18
Univ. of Illinois, Urbana/Champaign 84 19
Univ. of Iowa 80 20
Virginia Tech 74 21
Duke 73 22
Rutgers 73 23
Penn State 64 24
Univ. of Georgia 64 25
Univ. of Virginia 62 26
NC State 60 27
MSU 48 35
MTU 18 78
WSU 12 91
MI Average 42
National Average 48
Average Best-in-Class (not inc. Univ. of CA) 255
MI Average/National Average 88%
6
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
Universities Ranked By License Income Received
Adjusted Gross License
Income Received (in Thousands) Rank
Columbia 89,160 1
Univ. of CA 74,133 2
Florida State 57,313 3
Yale 40,696 4
Univ. of Washington 27,879 5
Stanford 27,699 6
MSU 23,712 7
Univ. of Florida 21,650 8
Univ. of Wisconsin – Mad. 18,011 9
MIT 16,131 10
Emory 15,258 11
SUNY Research 13,539 12
Baylor College of Med 12,281 13
NYU 10,700 14
Johns Hopkins 10,353 15
Harvard 9,886 16
NC State 7,761 17
Tulane 7,572 18
Washington University 7,000 19
CA Inst. of Tech 6,500 20
Cornell 6,070 21
Carnegie Mellon 5,892 22
Univ. of Minnesota 5,662 23
Texas A&M 5,181 24
Univ. of Texas/ Southwestern Med. 4,857 25
Univ. of Michigan 3,473 33
WSU 458 85
MTU 222 102
MI Average 6,966
National Average 4,612
Average Best-in-Class (not inc. Univ. of CA) 35,766
MI Average/National Average 151%
For Adjusted Gross License Income Received UM ranks 33RD, WSU ranks 85TH, and MTU ranks 102ND, and the aver-
age of the Michigan universities out-performs the national average.
7
The quantity and quality of technology transfer activities are strongly related to the amount of research conducted at
the university. Therefore, the amount of sponsored research dollars received by a university is critically important to
technology transfer, thus universities were ranked by the sponsored research dollars received. Industry sponsored
research dollars are also an indicator of economic development and collaboration between the universities and the pri-
vate sector and, therefore, this metric is included. The number of disclosures and licenses available at an institution is
a function of sponsored research dollars albeit the exact correlation has not been. To report the number of disclosures
and licenses, as fairly and accurately as possible, the numbers are normalized for dollars of sponsored research. The
average Michigan university approaches or out-performs the national average on all criteria.
Universities Ranked By Sponsored Research Dollars and Their
Industry Sponsored Research, Disclosures, and Licenses
Sponsored Industry Disclosures Licenses
Research Sponsored per $10 M per $10 M
(in Thousands) Rank (in Thousands) Research Dollars Research Dollars
Univ. of CA 1,864,901 1 183,164 4.4 1.2
Johns Hopkins 1,010,088 2 45,500 2.5 1.0
MIT 725,600 3 74,000 5.3 1.3
Univ. of Michigan 499,722 4 35,994 3.2 0.8
Univ. of Washington 479,655 5 47,576 4.7 2.4
Univ. of Pennsylvania 477,000 6 29,000 5.1 1.2
Univ. of Wisconsin - Mad. 421,600 7 NA 6.6 2.5
Univ. of Minnesota 417,556 8 30,187 5.2 1.7
Stanford 417,037 9 32,937 5.7 3.5
NC State 413,369 10 53,509 3.6 2.0
SUNY Research 405,238 11 16,147 5.0 1.1
Texas A&M 402,203 12 34,722 3.6 1.3
Harvard 401,850 13 18,345 2.7 1.2
Penn State 393,462 14 68,558 4.8 1.0
Cornell 376,784 15 12,139 4.6 4.0
Univ. of Illinois, Urbana/Champaign 358,247 16 12,864 2.9 1.1
Duke 334,506 17 121,630 3.4 1.2
Washington 333,196 18 21,691 3.1 3.4
Univ. of Colorado 331,579 19 87,205 2.4 0.3
Univ. of Arizona 320,245 20 16,660 3.0 0.3
Yale 315,953 21 15,242 2.2 0.7
Univ. of Pittsburgh 311,200 22 26,100 3.4 0.5
Univ. of Florida 280,408 23 46,459 4.9 0.4
Columbia 279,276 24 14,394 6.5 3.5
Univ. of Iowa 259,514 25 39,750 3.0 0.8
MSU 207,912 36 7,647 4.1 1.6
WSU 147,000 63 11,000 2.7 0.2
MTU 28,074 119 11,967 7.1 3.9
MI Average 220,677 16,652 4.3 1.6
National Average 169,536 16,030 4.8 1.3
Average Best-in-Class (Not inc. Univ. of CA) 464,634 33,781 5.8 2.7
MI Average/National Average 130% 104% 90% 122%
8
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
The success of economic development is reflected in the number of new start-ups. The raw start-up activities, as
well as start-ups per $10M research dollars numbers, are provided below. The conversion rates of disclosures to
licenses and start-ups are also reported. The average Michigan University falls considerably short of the national
average in the start-up activity. It should be noted that the universities are listed here by sponsored research rank-
ing. When ranking the universities by start-up activity, all the best-in-class universities ranked in the top 20 except
for the University of Washington.
Start-Up Activity for Universities Ranked High in Sponsored Research
Sponsored Start-Ups % of % of
Research per $10 M Licenses/ Start-Ups/
Rank Start-Ups Research Dollars Disclosures Disclosures
Univ. of CA 1 13.0 0.1 26.8 1.6
Johns Hopkins 2 7.0 0.1 42.4 2.8
MIT 3 17.0 0.2 24.9 4.5
Univ. of Michigan 4 2.0 0.0 26.6 1.3
Univ. of Washington 5 0.0 0.0 50.9 0.0
Univ. of Pennsylvania 6 6.0 0.1 23.4 2.5
Univ. of Wisconsin - Mad. 7 4.0 0.1 38.1 1.4
Univ. of Minnesota 8 5.0 0.1 32.4 2.3
Stanford 9 19.0 0.5 62.3 8.1
NC State 10 8.0 0.2 56.1 5.4
SUNY Research 11 3.0 0.1 22.9 1.5
Texas A&M 12 0.0 0.0 36.6 0.0
Harvard 13 2.0 0.0 44.0 1.8
Penn State 14 3.0 0.1 21.3 1.6
Cornell 15 4.0 0.1 87.2 2.3
Univ. of Illinois, Urbana/Champaign 16 4.0 0.1 37.5 3.8
Duke 17 2.0 0.1 35.7 1.7
Washington 18 4.0 0.1 109.6 3.8
Univ. of Colorado 19 1.0 0.0 12.7 1.3
Univ. of Arizona 20 3.0 0.1 11.3 3.1
Yale 21 3.0 0.1 32.9 4.3
Univ. of Pittsburgh 22 3.0 0.1 15.0 2.8
Univ. of Florida 23 2.0 0.1 7.4 1.5
Columbia 24 5.0 0.2 53.8 2.7
Univ. of Iowa 25 2.0 0.1 26.6 2.5
MSU 36 1.0 0.0 38.8 1.2
WSU 63 1.0 0.1 7.7 2.6
MTU 119 0.0 0.0 55.0 0.0
MI Average 1.0 0.04 32 1
National Average 2.0 0.13 33 3
Average Best-in-Class (Not inc. Univ. of CA) 9.0 0.19 46 3
MI Average/National Average 51% 31% 97% 44%
9
M I C H I G A N U N I V E R S I T I E S ’ B E N C H M A R K I N G R E P O R T
This report attempts to identify the best-in-class universities for benchmarking purposes, and although striving
to match their values would be an honorable goal, the ability to attain these goals in the short-term may not be
realistic.
It is appropriate to add a few words regarding the difficult task of selecting model institutions consid-
ering that universities and states are so diverse. It should be noted how atypical the six model institu-
tions really are, and how different they are from the Michigan universities. Consider the University of
California system, if Michigan had that system, all four of the highlighted Michigan institutions
(together with several others) would be counted as one. By the same token, if the individual University
of California campuses were considered, most of them would not show up high on the list. Stanford,
MIT and Columbia are elite private universities, while Michigan does not have any large, private uni-
versities. The University of Wisconsin has been doing technology transfer since the 1920's, making it
different from all but a few of US institutions. From a cultural standpoint, it should be noted that three
of the best-in-class institutions are on the West Coast, and two are on the East Coast. Only one is in the
Midwest, where the entrepreneurial culture is likely to be more or less similar to what it is in Michigan.
The benchmarking process, including an identification of universities to benchmark against and identify loca-
tion of best-in-class, is a difficult process because there are many factors involved. When choosing the universi-
ties to benchmark against, universities consider the available sponsored research dollars, the private/public
nature of the university, the urban or small town location of the university, access to a medical school, access to
private institution clusters, incubators, etc. Using these various factors, Michigan universities have identified dif-
ferent universities that they benchmark themselves against.
The Technology Transfer Offices of the Michigan universities contributed the following explanations regarding
their respective universities.
10
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
U N I V E R S I T Y O F M I C H I G A N
explanation provided by Ken Nisbet
The University of Michigan is seeing the results of increase over FY2000. Excluding the sales of equity,
organizational changes, institutional investments, and royalty revenue still increased from $3.0 million to
increased collaboration with community, state, and $3.9 million, a 30% increase over FY2000.
national resources. In FY2001, technology disclosures
increased 8%, patent applications increased 11%, and Licenses to new business start-ups increased 50% over
license agreements increased 33%, indicating good last year, with 12 new business start-ups launched from
progress in accelerating the transfer of technology to the Medical School, College of Engineering, and the
the marketplace and increased contacts and resources School of Education. The potential of these new start-
for their inventor community. ups is quite impressive, and many received substantial
venture and private equity funding.
License revenues (license fees, royalty payments and
sales of equity) reached $8.2 million in FY2001, a 105%
UM Tech Transfer Activity
200 70
Number of License Agreements
60
150
50
Number
40
100
30
50 20
10
0 0
1995 1996 1997 1998 1999 2000 2001
Fiscal Year
Disclosures Patent Apps License Agmnts
RECENT UM NEW BUSINESS START UPS
FY 1998 FY 1999 FY 2000 FY 2001
Clark-MXR * Gradient * Enlighten Sports * Molecular Therapeutics *
HealthMedia * Xtera FreshOnLine * Nanobio *
IDE, Inc. * HandyLab * CSCG, Inc. *
Intralase Interlink * Discera *
ISSYS* Living Text * Sensicore *
Tal Materials * MedCharge * Arbor Networks
Visitek * NextHop Xeotron
Rubicon Genomics * Translume *
Therasonics *
Keracure *
Originus *
* indicates Michigan headquarters Artemis Express *
11
IMPROVED ORGANIZATIONAL EFFECTIVNESS
The UM Tech Transfer organization, comprising the Changes in the central Office of Technology Transfer
Office of Technology Transfer (formerly the have complemented the school efforts. The newly
Technology Management Office) and Satellite Offices hired Director of Licensing works with the schools
in the College of Engineering and the Medical School, offices and other licensing professionals to enhance
refined its operational model to leverage the strengths and streamline the process of patent protection and
of those units and the individual skills and expertise of licensing. This position also improves the focus on
the entire tech transfer team. responsiveness, best practice benchmarking, and con-
sistency in policy and practices.
The school offices are structured to take advantage of
their local focus to increase the frequency and quality UM has refined its new business development model,
of the interactions with the inventor community. Both which offers pro-active business formation services for
the Medical School and College of Engineering have activities from across the campus, including market
established Faculty Review Committees to assist in research, business plan development, and connections
the technology assessment process, especially relating to consultants and investors. These activities, fairly
to patenting. The school and college investments in unique among national tech transfer offices, are a
tech transfer personnel, patenting, and technology gap major reason for their success this year in establishing
funding have improved the technology portfolio and 12 new business start-ups.
accelerated the patenting and licensing process.
ENHANCED COLLABORATION
FY2001 was a year of deepened collaborations across Andel Institute, and various businesses and organiza-
campus and the community. tions. These activities include technology and business
initiatives to improve and accelerate the collective
The TechStart student internship program, a partner- tech transfer capabilities.
ship with the School of Business Zell-Lurie Institute
for Entrepreneurial Studies, provides students oppor- In FY2001, UM Tech Transfer continued and expanded
tunities to put theory into practice. Graduate students the University’s leadership role in the community by
from the Business School, College of Engineering, founding the first BioMed Expo, co-founding and par-
Medical School, Law School, and School of ticipating in the programs and activities of the Ann
Information provide business assistance to UM start- Arbor IT Zone (including the IT Boot Camp), and
up companies and faculty inventors. The intensive serving on various Boards (New Enterprise Forum,
mentoring process provides a rich educational experi- Ann Arbor Chamber of Commerce, Michigan
ence and local job connections after graduation for the Bioscience Industry Association, and the Washtenaw
interns. Development Council). UM Tech Transfer also co-
founded the inaugural Great Lakes Venture Quest
UM Tech Transfer plays a major role in activities Business Plan Competition to foster entrepreneurship
involving MEDC, along with WSU, MSU, the Van throughout Michigan.
12
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
The University of Michigan chooses to benchmark against six universities, including four of the best-in-class
universities (MIT, University of Washington, University of Wisconsin, and Stanford). Although they rank 4th in
sponsored research dollars, UM falls short in the other criteria compared to most of their chosen benchmarking
universities. The good news is UM’s performance for the licensing and start-up metrics shows improvement in 2000.
University of Michigan Technology Transfer Activity
Adjusted Gross Industry Disclosures Licenses Start-Ups
Sponsored Licenses and License Income Sponsored per $10M per $10M per $10M % %
Research Nat'l Options Yielding Received Research Research Research Research Licenses/ Start-Ups/
(in Thousands) Rank License Income (in Thousands) (in Thousands) Dollars Dollars Start-Ups Dollars Discl. Discl.
Johns Hopkins 1,010,088 2 137 10,353 45,500 2.5 1.0 7.0 0.1 42.4 2.8
MIT 725,600 3 346 16,131 74,000 5.3 1.3 17.0 0.2 24.9 4.5
Univ. of Michigan 499,722 4 90 3,473 35,994 3.2 0.8 2.0 0.0 26.6 1.3
Univ. of Washington 479,655 5 185 27,879 47,576 4.7 2.4 0.0 0.0 50.9 0.0
Univ. of Wisconsin - Mad. 421,600 7 191 18,011 0 6.8 2.5 4.0 0.1 36.9 1.4
Stanford 417,037 9 339 27,699 32,937 5.7 3.5 19.0 0.5 62.3 8.1
UNC - Chapel Hill 198,081 39 47 1,697 5,925 5.9 3.5 0.0 0.0 60.3 0.0
13
M I C H I G A N S TAT E U N I V E R S I T Y
explanation provided by Norm Pollack
Michigan State University has focused its efforts over pay and conflict of interest; it is attempting to foster a
the past year on improving the technology transfer more entrepreneurial climate in and around the cam-
process from the ground up. Its Office of Intellectual pus by sponsoring seminars and training sessions for
Property has been updating policies, training staff, and interested faculty, students and others; it is collaborat-
raising the standards for patents and licenses. It is ing with the Eli Broad College of Business to establish
striving to get more value from its patent dollars; to a program in which MBA students will help to assess
obtain the strongest and most defensible patent cover- start-up opportunities and develop business plans; it
age for its innovative discoveries; to negotiate fair and has initiated an intellectual property newsletter to
well-structured license agreements; to maintain good inform faculty and others about technology transfer
relations and close communications with its licensees; issues and funding opportunities; and it has estab-
and to do everything it can to move technologies to lished contact with venture capital firms both inside
market. and outside of Michigan. With help from MEDC, it
has hired an associate to foster the success of faculty
The creation of entrepreneurial technology-based ven- start-up companies. In collaboration with other
tures is an outgrowth of the technology transfer Michigan academic institutions MSU has established
process. MSU is taking a long-range, multi-pronged the Michigan Universities Commercialization
approach to improve its results. Its primary goal is not Initiative (MUCI), which provides challenge grants for
to increase the number of start-ups, but rather to promising projects, as well as other forms of funding to
achieve a higher ratio of successes to failures. MSU’s enhance the universities’ collective commercialization
Office of Intellectual Property is working within the efforts.
organization to improve policies on outside work for
Michigan State University chooses to benchmark against land-grant colleges and universities that receive similar
sponsored research dollars. Although MSU out-performs their benchmarking universities for the adjusted gross
license income received metric, MSU falls in the middle of the pack on the remaining metrics.
Michigan State University Technology Transfer Activity
Adjusted Gross Industry Disclosures Licenses Start-Ups
Sponsored Licenses and License Income Sponsored per $10M per $10M per $10M % %
Research Nat'l Options Yielding Received Research Research Research Research Licenses/ Start-Ups/
(in Thousands) Rank License Income (in Thousands) (in Thousands) Dollars Dollars Start-Ups Dollars Discl. Discl.
Ohio State 257,950 27 34 1,626 45,635 3.9 1.0 0.0 0.0 26.0 0.0
Purdue 253,018 29 201 2,149 32,007 4.0 3.0 4.0 0.2 74.5 3.9
MSU 207,912 36 48 23,712 7,647 4.1 1.6 1.0 0.0 38.8 1.2
Iowa State 186,700 41 298 1,813 14,900 8.6 8.7 2.0 0.1 101.9 1.3
Colorado State 147,664 62 18 387 7,136 2.0 0.6 4.0 0.3 30.0 13.3
14
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
WAY N E S TAT E U N I V E R S I T Y
explanation provided by Fred Reinhart
Wayne State University’s (WSU) technology transfer In addition to traditional licensing, Wayne State
effort goes back to 1988 when one professional was University has a history of spinning out companies
assigned the task of handling intellectual property based on promising platform technology. Five WSU
licensing. In 1996, the office was restructured. It has start-ups, Lumigen (MI), Thermal Wave Imaging (MI),
grown from two people in 1996 to six people in TherOx (CA), Neomatrix (CA), and DNA Software
November 2001. By the first quarter of 2002, WSU’s (MI) are doing very well and are marketing or develop-
Technology Transfer Office (TTO) will comprise six ing a wide range of products. TTO has targeted ven-
professionals and two administrative support people. ture development as a major endeavor and recently
TTO enjoys strong executive-level support and has brought in a start-up company specialist to lead this
access to financial resources to pay for patents and its program and create a platform of resources to assist
general operations. WSU’s goal is to continue building faculty who indicate an interest in starting companies
a highly effective and comprehensive technology using WSU intellectual property.
transfer program based on traditional licensing and
venture development. Venture development functions include:
s Assisting faculty with commercial feasibility
In terms of traditional licensing, TTO has made signif- studies, business plan development, company
icant progress during the last two years since the structuring, strategic partnerships, and fund
report shown on page 17. License and option agree- raising
s Establishing readily accessible networks in key
ments have increased 267%, revenue has grown 192%,
support areas (private investors, business
and patent applications filed increased 80% compared
development consultants, executive recruit-
to FY1999. The addition of two key positions, a tech-
ers, lawyers, accountants, etc.)
nology licensing specialist and an industry liaison for s Negotiating private investment contracts on
the Smart Sensors and Integrated Microsystems behalf of faculty and their start-up companies
Institute, will have a positive impact on the growth of s Collaborating with WSU’s Business School and
TTO’s licensing activities. TTO has a very cooperative Division of Research to create interdisciplinary
relationship with WSU centers of excellence and col- teams of graduate students to evaluate cur-
leges that generate large numbers of inventions such as rent WSU research projects for their commer-
the School of Medicine, College of Science and cial viability in a start-up environment
Engineering. One area of focus during the next few
years will be the establishment of an innovative One initiative of note is WSU’s planned Research and
marketing and promotional program for WSU’s tech- Technology Park. In cooperation with the City of
nology licensing opportunities using specialized Detroit, Henry Ford Health Systems (HFHS), General
consultants, as well as in-house staff dedicated to this Motors, and a number of companies and economic
function. development organizations in the Detroit area, WSU
15
competed for and was awarded a SmartZoneSM desig- s Coordination with the Biotechnology Industry
nation for a large technology park. The initial phase of Organization
this park will include a high-technology business incu- s Leadership in the activities of the Michigan
bator. The presence of this park, once operational, will Microsystems Alliance
strongly catalyze interactions between WSU/HFHS s Involvement with all programs of the Michigan
Universities Commercialization Initiative
and industry and encourage more spin-out companies
(MUCI) to advance the efforts of the state’s
and transplants from other states.
universities and research institutes in promot-
ing technology transfer and economic devel-
To be successful in the areas outlined above, WSU is opment. WSU has created the MUCI-funded
engaged in a comprehensive range of activities includ- position of Incubator Liaison to assist incuba-
ing: tor efforts at UM, WSU, MSU, and the Van
s Support for and involvement in Great Lakes
Andel Institute.
Venture Quest to foster an environment that s Leadership and involvement in key national
supports entrepreneurial endeavors technology transfer organizations such as the
s Leadership in the Michigan Biosciences
Association of University Technology
Industry Association to advance the state’s Managers and the Licensing Executives
bioscience industry and build a critical mass of Society
biotechnology and biomedicine companies
s Leadership in planning and implementation of
the annual BioMed Expo to facilitate network-
ing across the state in the biosciences
16
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
Wayne State University chooses to benchmark against universities that were not only situated in urban areas similar
to WSU’s location in Detroit, but also whose sponsored research dollars fell in the same range as WSU’s. WSU falls
mainly in the bottom half of their benchmark universities for most metrics. The metric where they performed the best
was industry sponsored research dollars.
Wayne State University Technology Transfer Activity
Adjusted Gross Industry Disclosures Licenses Start-Ups
Sponsored Licenses and License Income Sponsored per $10M per $10M per $10M % %
Research Nat'l Options Yielding Received Research Research Research Research Licenses/ Start-Ups/
(in Thousands) Rank License Income (in Thousands) (in Thousands) Dollars Dollars Start-Ups Dollars Discl. Discl.
Univ. of Rochester 185,488 42 17 2,994 18,632 4.6 0.3 1.0 0.1 5.9 1.2
Case Western 176,519 46 16 505 6,829 3.3 0.6 3.0 0.2 16.9 5.1
Univ. of IL Chicago 175,093 48 45 1,839 9,683 3.5 1.1 2.0 0.1 32.8 3.3
WSU 147,000 63 12 458 11,000 2.7 0.2 1.0 0.1 7.7 2.6
Univ. of MD, Baltimore 131,485 67 16 117 NA 4.7 0.5 2.0 0.2 11.3 3.2
Univ. of Cincinnati 115,025 70 16 3,906 5,989 4.1 1.3 4.0 0.3 31.9 8.5
Univ. of Conn 105,800 73 10 481 12,500 4.3 1.1 2.0 0.2 26.7 4.4
17
M I C H I G A N T E C H N O L O G I C A L U N I V E R S I T Y
explanation provided by Jim Baker
The Intellectual Property and Technology ing from both governmental and corporate entities
Commercialization Office at Michigan Tech (IPTC) and therefore, technology transfer is defined much
has completed a transition in recent years that has more broadly than license income.
resulted in increased focus on leveraging the business
value of its intellectual property portfolio. This transi- Michigan Tech is also acting on the integration
tion began when the office was merged with the between sponsored research and technology transfer
Corporate Services unit in July of 2000, further through its electronic management and marketing sys-
strengthening the relationship between Michigan tems and was recently awarded a project through the
Tech and all of its corporate partners, including National Science Foundation in collaboration with pri-
licensees. Michigan Tech has also driven this transi- vate and public partners. This project will support the
tion at the upper level administration by separating development of an integrated Knowledge Man-
the formerly combined position of Vice Provost for agement Infrastructure that will facilitate efficient
Research and Dean of the Graduate School. The cre- and comprehensive management and promotion of
ation of a new position of Vice President for Research intellectual assets. While deals are completed through
will allow for increased focus on the advancement of extensive personal interaction, the Knowledge
the research enterprise including growth of sponsored Management Infrastructure will support deal flow by
research and licensing revenue. increasing efficiency of office operations and market-
ing activities.
Relative to the technology transfer function of the uni-
versity, this new structure supports growth of activities Michigan Tech is supporting entrepreneurialism with
that relate to a broader range of issues than just licens- efforts both on and off campus. Partnering with the
ing revenue. These activities can produce regional and Cities of Hancock and Houghton and the local business
national economic development outcomes through community, Michigan Tech has participated in a suc-
business development consistent with the research cessful effort to receive SmartZoneSM designation for
mission of the university. A particular emphasis is to the Michigan Tech EnterPrise SmartZoneSM (MTEPS).
structure license agreements that truly represent a MTEPS is expected to facilitate the spin-off of
win/win for the university and the licensee by maxi- University technologies into local private companies
mizing total revenue to both while taking the best and encourage the location of offices for existing high
advantage of complimentary strengths. The university tech companies, particularly for functions that would
can provide research strengths that support and benefit from easy access to a highly trained technical
enhance the development and commercialization workforce. On campus, through the Center for Tech-
efforts of the licensee, and by partnering effectively nological, Innovation, and Leadership (CenTILE),
through the research process, commercialization can IPTC is working actively with students to encourage
be conducted more efficiently and commercial success innovation and spin-off activity. A recently established
is better assured. In this process, technology transfer Student Inventors and Entrepreneurs Club has regular
is built in to the front end of research relationships involvement with IPTC and is providing students with
rather than being dealt with after all or most of the opportunities to resources, expertise, and access to a
research is done. A significant advantage of this network of individuals interested in entrepreneurship
approach is that the intellectual property portfolio and invention.
supports the procurement of sponsored research fund-
18
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
Michigan Technological University chooses to benchmark against universities that have similar engineering activi-
ties and Lehigh University that had similar sponsored research dollars. MTU does much better on all metrics com-
pared to Lehigh University. MTU does considerably better in disclosures and licenses per $10 M research dollars
compared to Georgia Institute of Technology and the University of Missouri, even though MTU’s sponsored research
dollars is considerable less than these universities.
Michigan Technological University Technology Transfer Activity
Adjusted Gross Industry Disclosures Licenses Start-Ups
Sponsored Licenses and License Income Sponsored per $10M per $10M per $10M % %
Research Nat'l Options Yielding Received Research Research Research Research Licenses/ Start-Ups/
(in Thousands) Rank License Income (in Thousands) (in Thousands) Dollars Dollars Start-Ups Dollars Discl. Discl.
Georgia Inst. of Tech. 223,642 33 46 2,038 59,091 5.7 0.8 3.0 0.1 14.2 2.4
Univ. of Missouri 212,239 34 21 1,545 10,832 2.9 0.8 1.0 0.0 25.8 1.6
MTU 28,074 119 18 222 11,967 7.1 3.9 0.0 0.0 55.0 0.0
Lehigh Univ. 25,312 123 7 118 1,551 0.0 0.0 0.0 0.0 0.0 0.0
19
Although the 1999 data shows that the Michigan uni- ing ground in the areas of start-ups, number of licenses
versities fall behind the best-in-class, preliminary data generating income, and income received. Sponsored
for 2000 indicates the Michigan universities are gain- research dollars also continued to increase in 2000.
UM, MSU, and WSU and the average Michigan university show increased sponsored
research dollars in 2000 compared to 1999. Also indicated here is the increased
activity trend since 1996.
Total Sponsored Research Expenditures (1996-2000)
$550
$492 $500
$441
$380
$239
$228
$208 $213 $221
$194 $189
$179
$157 $162 $170
$148 $150 $147 $143 $150
$124 $138
$112
$24 $24 $27 $28 $21
Univ. of Michigan Michigan State Univ. Wayne State Univ. Michigan Tech Univ. National Average Michigan Average
1996 1997 1998 1999 2000
The number of start-ups in 2000 quadrupled over 1999 at the University of Michigan.
The average Michigan university for the metric, start-ups per $10 M in research dollars,
shows a decline since 1996, though an improvement is seen in 2000.
Start-ups per $10 Million in Research Expenditures
(1996-2000)
0.42 0.41
0.21 0.23
0.18 0.19
0.16 0.15
0.13 0.13 0.13
0.12
0.10 0.09 0.08 0.10
0.07
0.05 0.05 0.05 0.04 0.05
0.04 0.04
0.0 0.0 0.0 0.0 0.0
Univ. of Michigan Michigan State Univ. Wayne State Univ. Michigan Tech Univ. National Average Michigan Average
1996 1997 1998 1999 2000
20
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
UM, WSU, and the average Michigan university show increased licenses and options yield-
ing license income in 2000 compared to 1999. Also indicated here is the increased activity
trend since 1996.
Licenses & Options Yielding License Income
(1996-2000)
111
91 90
82 83
50 48 52
48 47
41 41 43 40 42
36 38 36
33 34
18 16
14 13
11 11 12 8
7
Univ. of Michigan Michigan State Univ. Wayne State Univ. Michigan Tech Univ. National Average Michigan Average
1996 1997 1998 1999 2000
UM, MSU, and WSU and the average Michigan university show increased License Income
Received in 2000 compared to 1999. Also indicated here is the increased activity trend
since 1996.
License Income Received (1996-2000)
$25,721
$24,337
$23,712
$18,293
$17,232
$8,091
$7,627
$6,996
$6,806
$5,091
$4,720
$4,612
$4,338
$4,000
$3,658
$3,473
$2,788
$1,780
$1,053
$1,075
$686
$458
$438
$222
$100
$167
$191
$137
$99
Univ. of Michigan Michigan State Univ. Wayne State Univ. Michigan Tech Univ. National Average Michigan Average
1996 1997 1998 1999 2000
21
C O N C L U S I O N S
The review of the best-in-class universities along with more quickly are two traits of best-in-class universi-
the recommendations of the Governors Innovation ties. The best-in-class universities have fine-tuned and
Forum suggests that there are four general areas streamlined their tech transfer commercialization
which, if developed, could further stimulate the trans- activities to do just that. The MEDC has assisted
fer and commercialization of ideas. Michigan universities in this effort by promoting the
business development activity in the university tech
These areas are: transfer departments by providing funding to add
s Superior Students/Faculty technology transfer staff (MEDC-funded tech transfer
s Commercialization Activity staff, Michigan Life Sciences Corridor (MLSC) fund-
s Entrepreneurial Support
ed tech transfer staff, and via a MLSC funded incuba-
s Entrepreneurial Infrastructure
tor liaison staff). The MEDC is also addressing this
issue by offering business development services
Superior Students/Faculty — The most obvious reason outside the university walls. The MEDC’s business
the best-in-class universities are best-in-class is they development staff assists university inventors on tech-
produce blockbusters. These blockbusters begin with nology commercialization issues. The MEDC,
attracting superior talent to universities. Attracting through the MLSC, has contracted with Biotechnolo-
and retaining superior students and faculty must be a gy Business Consultants (BBC) to provide business
top priority if universities want to successfully pro- development services and training for university
mote technology transfer. inventors and entrepreneurs. The MEDC, through
various grants, has also added their support to univer-
In an attempt to better understand some of the factors sity business development efforts. These grants fund
behind retaining technically skilled young people, the university internship and entrepreneurial programs
MEDC and the Presidents Council, State Universities where students provide business development support
of Michigan conducted a survey and charted the to university start-ups and inventors. The MEDC,
migration patterns of recent Michigan graduates. The through their sponsorship of the Great Lakes Venture
findings from this study were published in the College Quest (GLVQ), a business plan competition, is
Migration Study. The study showed that Michigan attempting to improve or streamline the business plan
does extremely well in retaining 79% of those gradu- writing capabilities of inventors. Finally, the MEDC
ates who have gone on to work in high-tech jobs. Even has made the greatest contribution to enhancing the
more noteworthy is data showing that 55% of students university commercialization activity by funding the
in these fields who come to a Michigan public univer- Michigan Universities Commercialization Initiative
sity from out-of-state remain in Michigan to work (MUCI). The University Challenge Fund will drive
after graduation. The fact that Michigan retains a high more ideas into the marketplace and at a quicker pace.
percentage of technically skilled Michigan university The fund supports a university start-up company
graduates, whether they begin as residents of the state resource and training database and an incubator liaison
or come from another place, is very good news. position that will streamline the commercialization
process.
Commercialization Activity — Bringing more ideas to
the marketplace or bringing those ideas to market
22
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION | TECHNOLOGY TRANSFER ASSESSMENT
Entrepreneurial Support — The best-in-class are also number of large and small private companies and their
the result of a successful entrepreneurial climate. intellectual support. Michigan has attempted to fill
Michigan has attempted to promote an entrepreneur- this gap by funding an incubator liaison program, the
ial culture by promoting better networking between designation of Michigan SmartZonesSM, and promot-
the universities, state and local governments, private ing collaboration on all state funded programs.
companies, and venture capitalists. Michigan SmartZonesSM are intended to stimulate the
The following are examples of these partnerships or growth of technology-based businesses and jobs by
networking activities: aiding in the creation of recognized clusters of new
s Partnership for Economic Progress and emerging businesses, those primarily focused on
s Local Advisory Groups commercializing ideas, patents, and other opportuni-
s Roundtables
ties surrounding university or private research insti-
s Governors Innovation Forum
tute R&D efforts.
s Michigan Life Sciences Corridor — Intellectual
Property Commercialization Committee
The release of the College Migration Study and the
s MEMS Consortium
Benchmarking Study points the way toward creating a
s Venture Capitalist Symposium
s Angel Network
culture that is necessary to produce an entrepreneurial
environment. While much work needs to be done, it is
Entrepreneurial Infrastructure — The best-in-class obvious Michigan has made significant strides toward
also had the advantage of incubators or access to a achieving an entrepreneurial environment.
23
1 AUTM Licensing Survey: FY1999, The Association of University Managers, Inc. (AUTM), 2000.
2 Douglas W. Jamison and Christina Jansen, Technology Transfer and Economic Growth, Journal of the Association of University
Technology Managers, VolumeXII, 2000.
3 Columbia University, Web-page.
4 MIT, Web-page.
5 Stanford University, Web-page.
*The Michigan Economic Development Corporation acknowledges and thanks Ken Nisbet, Norm Pollack, Fred Reinhart, and Jim Baker for
their time and input on this project.
24
300 N. WASHINGTON SQ., LANSING, MI 48913 | PHONE: 517.373.9808
E-MAIL: MEDCSERVICES@MICHIGAN.ORG | WWW.MICHIGAN.ORG
300-011029VC
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