Tech Transfer is defined as the process of sharing of skills, knowledge, technologies, methods of manufacturing among governments and other institutions to ensure that scientific and technological developments are accessible to a wider range of users who can then further develop and exploit the technology into new products, processes, applications, materials or services.
Technology brokers bridge the disparate worlds of research and business. Many companies, universities and governmental organizations now have an “Office of Tech Transfer” dedicated to identifying research which has potential commercial interest and strategies for how to exploit it.
Many factors influence an institution’s ability to transfer and successfully commercialize its research. Internal factors included the strength and focus of the university research base: leadership, incentives, and rewards: history and strength of corporate relations with the university and research units; and the entrepreneurial climate. External factors included the availability of angel and seed capital, laboratory and incubation space, legal assistance, management capacity, and networking opportunities.
The Tech Transfer industry is riddled with inefficiencies which translate directly to opportunity for the Company. The United States Government, Corporations and Universities spend billions of dollars each year to develop “unattached” technologies. The road between a discovery generated from basic research to a commercial product is long and, according to some, rife with significant roadblocks. Thus, many viable technologies never see commercial success because of inefficiencies in the Tech Transfer system leading to a literal abandonment of great technologies. Innovators and investors alike routinely claim that a “funding gap” or “Valley of Death” exists at an intermediate stage of this process, between basic research and commercialization of a new product. If intermediate-stage financing is not available to individuals and firms that allow them to take a new innovation or discovery and transform it into a commercial product, then society should expect to see a diminished return on the public support of early stage R&D.
The “Valley of Death” is created by several factors. Many research institutions focus is on the discovery of new technologies but have no focus on helping these technologies reach commercial markets. Frequently, the investment required in a new technology is too large for Angel Investors and too small for Venture Capital Firms. Also, unattached technologies are ignored since they require pre-established management teams as a requirement for investment. Finally perverse incentives of large companies or entrepreneurs to maintain the status quo are problematic to the commercialization process.
With approximately 60 percent of the nearly $150 billion federal R&D budget funneled directly to university labs, the Obama administration, too, recognizes that it is imperative that academic innovation finds a more streamlined path to the marketplace. Despite this support, successful commercialization of new knowledge remains inconsistent. Case in point, while funding from the National Institutes of Health has increased to some $30 billion annually, representing a more than doubling of funding over the past fifteen years, the output of new FDA-approved drugs has actually been in decline.Only a very small segment of new ideas with commercial application or the potential for societal impact result in the formation of new companies. This is a travesty when one considers the United States government, Corporations and Universities spend billions of dollars each year to develop “unattached” technologies.
US Commerce Secretary, Gary Locke stated,“America’s innovation ecosystem isn’t as efficient or as effective as it needs to be,” and Locke warned that “the United States cannot afford to merely fund research and say a prayer that some entrepreneur will commercialize it down the road”. Many viable technologies never see commercial success because of inefficiencies in Tech Transfer system. Industry insiders refer the technologies “sitting on the shelf” as residing in “The Valley of Death”.
The Kauffman Foundation, the world’s largest foundation devoted to entrepreneurship, defines the industry of Tech-Transfer as being in a challenged state. In 2010, Carl Schramm, CEO of the Kauffman Foundation shared the following;“…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 Kauffman Foundation predicted it will take a third-party company with a for-profit motive and infrastructure to simultaneously overcome both the tech-transfer and market inefficiencies. The effort to progress unique technologies by, “creating a competitive licensing system for University Innovators is one of Harvard Business Reviews; “Ten Breakthrough Ideas for 2010“, one of the ten ideas that they say “will make the world better”…