In an increasingly globalized world where economic activity is markedly more knowledge-intensive, universities serve as significant catalysts for economic growth and innovation in high-tech industries. As this trend continues, the role of universities in commercializing research and innovation – “university entrepreneurship” – has only begun. Over the past 3 decades, university entrepreneurship has been a topic of substantial policy debate; accordingly, universities must address the factors and features of their entrepreneurial role in the innovation system, lest both economic growth and the fundamental purpose of the university system suffer. The crux of the debate lay in the pressures facing universities to bring innovations to market, which some see in conflict with their traditional research purpose. Commercializing university research, it is argued, potentially comes at the detrimental cost of universities’ primary aims of education and community outreach. This essay, addressing the main aspects of that debate, outlines the role, pressures, and issues facing the entrepreneurial university.
With universities expanding their patenting, licensing, and commercializing of research, the potential they hold to spark innovation and economic growth increases. However, despite this, innovative economic growth is not an automatic nor guaranteed result. Means must be found to facilitate bringing university research to the market. Solutions seeking to increase this conversion rate center on the university structure and “technology transfer” – the transfer of new knowledge to industry, through support of academic research, and the movement of scientific talent to the private sector, in the form of trained graduate. A key legislative solution is the 1980 “Bayh-Dole Act,” which allows universities to retain intellectual property ownership from federally-sponsored research and development. Prior to 1980, most government-owned patents borne from university research had a low utilization rate because of industry’s hesitance to commercialize products without ownership of title. By removing substantial bureaucratic red tape and transferring patent rights to the universities conducting research, the Bayh-Dole Act’s intent is to minimize the likelihood that government-funded university inventions would languish uncommercialized.
To that end, the Bayh-Dole Act has generally been regarded as successful in promoting the commercialization of university research brought about through federal funds. Though not all see it as the primary driver behind university patenting, it nonetheless has been a significant incentive for universities to patent and license their research and establish technology transfer offices that facilitate the transfer of that research to industry. Yet it is these new institutional roles – patenting, licensing, and technology transfer – that underlie the concerns about university entrepreneurship. The conflict lay in balancing university support for entrepreneurial activities and their primary role of education, research, and public service. With close cooperation between industry and academia augmenting university funding, revenue, and profit, a risk is seen emerging that the integrity of university researchers, research, and the university itself may be compromised.
Because of a profit motive to commercialize research, questions emerge whether research faculty involvement in entrepreneurial activities diverts priorities away from scientific exploration toward work on applied research with more practical application and technological innovation. Moreover, there exists concerns that research is driven to areas where there is market incentive for a new knowledge or product. Some see profit motives and the market-driven research that results as a corollary as generating a “winner-take-all” contest between universities as well as increasing politicization of government-funded research. If the above is indeed the case, at risk is the university role in advancing fundamental knowledge about the world. Equally so, market incentives fail to promote research and development into knowledge and technologies that benefit society at large but which would be incapable of recouping the considerable costs associated with the research. This would undermine the fundamental university mission and responsibility to make decisions based on global needs and particularly pay attention to research supporting neglected populations and geographic areas.
Considerable arguments with substantiating evidence exist to counter these concerns. Most scholars studying the issue find no evidence of a shift toward applied research away from basic research. Indeed, data gathered by the National Science Foundation found that the split between basic and applied research expenditures has not change despite the growing entrepreneurial role of universities. Some scholars have argued that commercialization, rather than favoring one form of research over another, increases the level of all research efforts. Buttressing this argument, a report analyzing technology transfer processes from Columbia and Stanford Universities found that financial incentives play little role in motivating faculty to embark on invention-producing research projects. After all, very few universities allow faculty to own their own inventions, regardless of whether the research funding came from industry or the government. Moreover, because of university expectations and systems such as tenure, scientists are more likely to face pressures to focus on basic research and publish their results in journals rather than to patent or license an invention.
Yet even if the above concerns aren’t unequivocal, other worries about the nature of university entrepreneurialism exist. Key among them are concerns about increased secrecy and publication delay on the part of university researchers because of the potential commerciality and profitability of their research and innovations. Some studies have found that researchers delay publication out of commercialization considerations, such as obtaining intellectual property protection before disclosing results. Others report that researchers will be more secretive about their research and withhold results because of the patent landscape and pressures to patent products that may emerge. Doing so would discourage and impede the advancement of knowledge – a key prerogative of the traditional university system – which therefore reduces the pursuit of scientific progress and in turn slows industrial innovation. Moreover, this has a negative effect to faculty who need input and research materials for the success of their research project. This issue is particularly pronounced in the clinical field, where an inhibitory effect on clinical practice and research has emerged accordingly. Patents and the proprietary nature of research materials have, studies show, been significantly detrimental to the ability of clinical laboratories to develop and provide genetic tests.
Evidence disputing these above worries is not as strong, as reports into the concerns have demonstrated results confirming their validity. Nonetheless, there are reasons to believe that researcher secrecy has been declining over the past years. As more university researchers file provisional patent applications in advance of formal patent applications, the incentive to postpone disclosure or delay publication has reduced. Furthermore, recent court decisions may prove far-reaching for access to proprietary research materials, positively affecting researchers developing drugs and genetic diagnostic tests. For example, in July 2011, the Court of Appeals for the Federal Circuit upheld that patents cannot apply to genetic diagnostic tests that only compare or analyze genetic sequences. Though overturning an earlier court decision that isolated gene sequences, because they are products of nature, are not patentable subject matter, further appeals on the matter are expected.
Beyond these concerns, there are questions about the roles and effects of university technology transfer offices (TTOS). TTOs are dedicated to identifying research with commercial interest, providing patent and commercialization support to researchers, assisting with marketability and funding sources, and serving as a liaison to industry partners. Many universities have channeled their innovation activities through their TTO. There are conflicting ideas and continuing debate on the role TTOs should play in promoting the launch of new firms, with some offices playing no role in start-ups while others are very involved in helping firms succeed. To that, though, some reports have found no effect on start-up rates from the presence of university incubators and whether a university is permitted to actively make venture capital investments in licensees.
However, some see that TTOs’ aggressive patenting and overvaluing of intellectual assets impedes university-industry collaboration, which in effect encourages companies to find other research partners. It is argued that some firms prefer foreign university partnerships because academic institutions abroad are less insistent on intellectual property ownership and complex agreements. Accordingly, universities may play a role in industrial decisions to offshore research and development activities. However, in rebuttal of that point, proponents of TTOs argue that others factors, such as research cost and skilled talent, are more significant in those decisions than attitudes towards academic institutions.
Nonetheless, the debate over the efficiency and structure of TTOs continues. While some are effective in disseminating inventions, others have become hindrances to technology transfer because of burdensome administration and bureaucracy. Touching on concerns related to the traditional university mission, some administrators have incentive to use TTOs as generators of revenue rather than focusing on transferring technologies, neglecting some inventions with little profit potential. Some see the monopolization of IP through TTOs and enhanced intellectual property rights at the early stages of research as a hindrance to the spread of scientific knowledge. These are indeed valid concerns; TTOs, through their commercialization mission and use as profit generators, are incentivized to operate in manners which may slow the spread of knowledge and create burdens on effective technology transfer. In response, ideas have been floated that address these concerns. Among them is to create an open, competitive licensing system for university technology – allowing faculty members to choose their own licensing agents, thereby increasing competition and speeding up commercialization. Others emphasize the need to move towards open source and open access technology dissemination.
Clearly, there are significant points of debate regarding the impact of university entrepreneurship on the system’s traditional missions of knowledge gathering, dissemination, and community outreach. Moreover, questions remain on the effectiveness of technology transfer through bureaucratic and administrative hindrance. Nonetheless, consensus surrounds the fact that the transfer of knowledge, through the support of academic research, plays an important role in economic growth. It may well be that universities, instead of coming into conflict with their traditional mission, are evolving into a new mission – knowledge factories that catalyze development, capability, and innovation within a larger innovation system. This mission synthesizes, and indeed requires the synthesis of, both their traditional and entrepreneurial roles, which perhaps may complement and reinforce each other. The debate surrounding university entrepreneurship today is an important stepping-stone and forum to resolve outstanding issues as that future is actualized. It lends credit and reinforcement to the continuing importance, regardless of commercial motives, of university focus on maximizing social impacts with technologies, innovation, and research that look beyond short-term profit and instead address what is best for society at large.