Technology Transfer: The Importance of Networks and Capacity Building in Technology Transfer and Commercialization

by Carl Schramm, President and Chief Executive Officer, The Ewing Marion Kauffman Foundation

The Ewing Marion Kauffman Foundation has studied the technology transfer process at universities and uncovered some interesting findings. The following is excerpted from a speech given by Carl J. Schramm, President and Chief Executive Officer of the Kauffman Foundation, at the IP Commercialization and Research Spinouts Conference in Boston on November 4, 2004.

We all have an interest in seeing that innovations are more efficiently brought to the marketplace. Universities want to more swiftly commercialize discoveries from their labs ... business and industry want to capitalize on the products and services that result from breakthrough research ... venture capitalists want to pluck the most promising investment opportunities ... and we at Kauffman want to see that entrepreneurship is cultivated to the greatest extent possible.

During the last two centuries, traditional economics recognized only two factors of production: labor and capital. Education, knowledge, and intellectual capital were believed to be outside of the system. Stanford economist Paul Romer’s New Growth theory recognizes the tremendous role and impact of ideas. It shows that economic growth doesn’t arise just from adding more labor to more capital. Rather growth is derived from new and better ideas expressed as technological progress. Romer believes that technology – and the knowledge on which it’s based – is an intrinsic part of the economic system, and that knowledge has, indeed, become the third factor of production in leading economies.

We know well that university-based research plays a central role in the innovation process. Basic research that leads to fundamental discoveries provides the underpinning of more applied technologies. University researchers are active in both areas of scientific inquiry and, since the Bayh-Dole Act of 1980, have been commercializing technologies at an increasing pace.

The Kauffman Foundation’s interest in propagating new knowledge and facilitating entrepreneurs’ ability to commercialize it led us to begin studying the technology transfer process at universities early last year.

On the surface, the system appears to be humming along quite nicely. Yet, closer scrutiny offers a sobering realization. Preliminary research shows that, residing in universities are a significant number of innovations either mired in the depths of bureaucracy or paralyzed by a lack of applied skills and resources, slowly struggling their way to the commercial forefront. Worse, many never make it at all.

The main problem lies in a technology transfer system that was created years ago to encourage commercialization, but has since developed symptoms that greatly inhibit its ability to do so.

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