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Science-Based Economic Development edited by Susan Raymond
Walter H. Plosila
North Carolina Alliance for Competetive Technologies
Presenters were asked to address some specific questions and issues including:
Dos and don'ts
What does industry look for?
What do universities look for?
Intellectual property problems and solutions.
Industry-university relationships and partnerships have ebbed and flowed in the U.S. over the past fifty to sixty years and have only reemerged in the past twenty years. After World War II, the federal government displaced industry in supporting the university research enterprise. Historically, such industries as chemicals, pharmaceuticals, metals, and others had strong ties to research universities prior to the war.
Since the early 1980s U.S. states have "experimented" as intermediaries in serving as catalysts to link their universities more closely with the needs of industry, particularly with small and medium-sized firms. Larger U.S. firms have had more sustained relationships with universities but primarily as philanthropic donators or to secure sustained relationships to get early opportunities to hire graduate students trained in these university centers. The states, to some extent, have experimented with building project relationships between faculty and firms as well as encouraging centers to focus on technology transfer. Lessons learned from these state efforts form the basis for many of the observations that follow.
What Does Industry Look For?
Industry's needs and interests in universities vary based on the firm's interests, e.g., fundamental research, technology trends, education, or training. Generally, firms are interested in technology breakthrough and new concepts; trends and developments; knowledge creation; patents; and education of students. Firms also want to build credibility, lower the risk of exploration, and solve problems in product or production. In the U.S., university-industry relationships have focused more on product breakthroughs, while in other countries the focus has been more on process improvements, with some U.S. exceptions, such as Pennsylvania's Ben Franklin Partnership.
A paradigm shift is underway from a linear to a nonlinear view of the research enterprise that necessitates closer, longer, and increasingly intersectoral (university-industry) relationships. Historically, we have viewed the university research enterprise as linear, with industry awaiting the results of the completion of the research before industry interaction occurs. Increasingly there is recognition that industry and the university must interact from concept through the entire period of discovery. Faculty must continue to interact with industry after discovery through to commercialization. The process is nonlinear because it is based on communications, feedback, trial and error, without clear demarcation lines between the university and industry throughout the process from idea through discovery and commercialization.
Key issues for industry are time frames for completion, delivery of results, and entering into relationships for mutual benefit. In the U.S., industry has traditionally supported "industrial affiliate" centers whereby for a set entrance fee (generally $30,000-$50,000) a firm became an "affiliate" member. The firm was able to attend several technical seminars each year and get an opportunity to interact with graduate students. Today, this model is disappearing as larger firms "downsize" and attempt to ensure a "return on investment" for their relationships with universities. Small firms never could join such centers, given their need to conserve scarce resources. Today, firms of all sizes are insisting that resources they provide universities need to be considered an "investment" with deliverables and measurable benefits in a clear time frame.
What Do Universities Look For?
Universities see relationships with industry as providing for improved research excellence; improved graduate education; support for additional facilities and equipment; publications; public service and regional problem solving opportunities; ongoing corporate support; opportunities for greater understanding of industry needs; and consulting opportunities for the faculty. A primary motivation for universities in university-industry agreements is a "resource" issue. Corporate support directly or indirectly provides a perceived means to obtain resources for research and the buildings and equipment in which to undertake the research enterprise. Because graduate education and the research enterprise are so closely intertwined in the U.S., corporate involvement provides an opportunity for more graduate research, hopefully on issues of interest to the private sector. Finally, university-industry agreements help support the university's public service and support role, particularly at regional universities.
Dos in Undertaking University-Industry Agreements
There are a number of lessons to be learned in ensuring effective industry-university interaction, some of which are summarized below:
1. Do recognize the diversity of models in industry-university agreements. There is not one right way or model to build a university-industry agreement.
2. Do talk before you act. Make sure you are working from a common shared agenda. Too often the parties' failure to communicate initially results in confusion and frustration throughout the process.
3. Do be clear on what the goals and objectives of the project or program are from the start by establishing a work program with specific milestones and deliverables, e.g., clearly established rules of engagement.
4. Do recognize that it takes time to build relationships between industry and universities and that just doing a project is not likely to build a long-term relationships. Long-term relationships require long-term commitments.
5. Do experiment and risk failure—and try different approaches over time. The benefits that may come out of a university-industry relationship will not be maximized if both sides are not willing to have open minds, explore new opportunities, and undertake tasks and responsibilities in new or different ways.
6. Do attempt to understand the respective cultures, motivations, and missions of each party. Recognize that each sector may have different expectations, requirements, and benefits from mutual interaction. Recognize and support multiple contributions that can be made to the effort.
7. Do maintain close and ongoing relationships that are frequent and clear between the two parties at different levels within each organization—top, middle, and bottom. Develop working relationships at all levels that lead to mutual trust. Feedback and open communication is absolutely essential to building the mutual respect that leads to this mutual trust.
8. Do establish a champion or facilitator as the key point of contact in each organization with each cosharing the responsibility for development and implementation of the work program, insuring milestones are achieved and deliverables provided when promised. Industry must equally participate in project selection as a coparticipant.
9. Do insist that relationships need not be between large industry and large universities. These relationships can also occur with small firms and individual faculty.
10. Do address the issue of incentives. The university should encourage faculty to engage in interdisciplinary efforts including projects that focus on applied and developmental, not just basic knowledge. Changes in faculty tenure policies should reward participating in industry-university agreements. Industry must encourage its employees to recognize the importance of knowledge, long-term thinking, and overcoming the "not invented here" syndrome.
11. Do establish metrics to measure success of the industry-university agreement from the start to insure both parties can evaluate progress and accomplishment throughout the process and at its conclusion.
Don'ts in Undertaking University-Industry Agreements.
There are a number of "do not do" lessons as well in ensuring effective industry-university interaction, some of which are summarized below:
1. Do not make the relationship a one-way street in which one party simply dictates its terms and conditions to the other.
2. Do not assume that the process of research discovery and technology deployment is a linear one that simply requires the researcher to go away and "discover," and simply let industry know the results when the research is completed. Rather, nonlinearity requires close, frequent interaction and mutual feedback.
3. Do not assume that the entire purpose of and reason for a university-industry agreement is to get more resources. If so, the result is likely to be a short-lived partnership.
4. Do not treat an industry-university agreement as the equivalent of a government grant with the same modus operandi, expectations, requirements, or results.
5. Do not ever give "no" as an answer to your partner.
6. Do not reject something because it was not invented within your organization.
7. Do not initiate a project jointly if there are not enough resources available.
8. Do not assume that the solution to a industry-university project is a technological one.
9. Do not assume that the benefits of a joint effort are equal for both parties and/or the same. Industry is interested in creation of wealth, universities in the creation of knowledge. An effective agreement can accomplish both by giving each party a "mutual veto" power over the project.
10. Do not assume that how you last structured an agreement will work the same way with another firm or university. Customization must be a hallmark of such agreements.
11. Do not assume that industry-university agreements cost a lot of money. Many of the best collaborations have started small and involve one or more small firms.
Intellectual Property Issues
There are a least two primary issues involved with intellectual property. The first is why a university is engaged in controlling intellectual property. The second issue is the impact university-industry agreements may have on the academic enterprise.
Controlling Intellectual Property
The first issue is whether the university is engaging in intellectual property to make money or to insure research is put to productive use. Many universities throughout the world have heard stories about Stanford or MIT in the U.S. and assumed that they too could become rich and famous. Several useful lessons in regard to higher education's views of the use of its intellectual properties might be in order:
While a few of the more elite universities in the world can afford to make their intellectual property resources into the equivalent of a Fort Knox, most universities would be wise to recognize that many of the costs of commercialization lie not in discovery, but in development and reduction to practice, resources that will be provided by industry under a licensing agreement.
A patent provides entry, but a considerable amount of nonuniversity resources will be necessary for that discovery to result in tangible products with tangible sales and royalties for the university.
The primary goal of intellectual property should be to see that knowledge gained from research is fruitfully deployed, transferred, or commercialized in ways that contribute to improved public health and safety, economic prosperity, or the overall betterment of our communities, environment, and quality of life. If in the process of accomplishing these objectives you can also see a return on your investment, you are that much better off.
Industry-University Agreements and the Academic Environment
The second issue of intellectual property affected by university-industry agreements has to do with infringing on the academic enterprise in terms of open sharing of knowledge and restrictions on publication due to agreements with industry. While there has been and continues to be much speculation about whether industry-university agreements might restrict academic freedom and the ability to communicate within the community at some point in the future, there has been surprisingly little documented evidence that industry restrictions have had any concrete adverse consequences. Part of this may be due to the fact that industry restrictions on publication generally do not restrict overall publication but only certain proprietary findings, and even these are usually restricted to only six- to twelve-month delays. Traditionally academic journals have taken this long or longer to accept and publish new scholarly articles, so it has been a moot issue.
With the rise of electronic publishing and "just in time" editorial acceptance of articles, some journals have reduced publication delays. The impact of such "instant' publishing on these industry-university agreements will need to be monitored.
In general, however, industry restrictions have been reasonable and flexible, and there is little evidence that publication delays have had any real negative impact. Industry has needed the delays in order to determine whether they wish to seek patent protection and then to file.
Conclusions
University-industry agreements are likely to increase in importance as larger firms throughout the world outsource their basic R&D and downsize their internal R&D operations. In addition, it is not clear that national governments, at least in the industrialized nations, are as likely to continue to invest in the basic university research enterprise as they have done since the end of World War II.
The increased complexity of technology, increased needs for sophisticated testing and other equipment, and the increasingly short half-lives of products suggest the need for small and medium-sized firms to access outside expertise and knowledge to address new concepts and solve technological problems. Consequently, small and medium firms are also more likely to call on universities for assistance.
Finally, universities are not monolithic wholes that are copycats of each other. The diversity of higher education institutions throughout the world is likely to create a wide diversity of models for business-university agreements that fit the specific needs of firms at various stages of their life cycles. Experimentation should be the guiding word in university-industry agreements for the near term. As we gain more knowledge about the experiences with such agreements, we can hope to increase our understanding of this important part of the policy framework for science-based development.
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