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Integrating the Federal R&D System into the Economy


Written by Joseph Allen
Allen & Associates
Posted: May 29, 2013 @ 9:00 am

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Determine that the thing can and shall be done, and then we shall find the way.  ~ Abraham Lincoln

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Countries, like people, have inherent potential assets for achieving success.  The question life poses is what is actually done to utilize them.  A tremendous potential asset the U.S. enjoys is possession of the greatest public research system in history.  It’s staffed by some of the most creative people in the world working in state of the art facilities performing cutting edge research in every field of science.  The system designed after World War II does exceedingly well in what it was intended to do:  pushing forward the frontiers of science; and helping federal agencies meet their mission needs.

However, neither goal is oriented toward the commercialization of resulting discoveries by our private sector.  And therein lies the rub.  The Lab to Market Summit at the White House Conference Center held on May 20 spent a day looking to solve that conundrum.We have made significant strides over the past 30 years through laws like the Bayh-Dole Act, the Federal Technology Transfer Act, and supporting Executive Orders leading to the creation of 9,000 new companies around university inventions, the development of 153 new drugs from federal funding now protecting public health world-wide, the leadership of the U.S. biotechnology industry, the addition of $836 billion to our gross domestic product supporting 3million good jobs from university patent licensing between 1996-2012, etc.

Still as far as we have come, it’s clear that we could be doing even more to reward the hard earned taxpayer dollars spent on public R&D.

The rapid increase of international economic competition coupled with a cutting back in basic research by U.S. industry makes it imperative that we better integrate government funded research into our economy.   Any country would love to have this “problem,” but moving from potential to realization is not at all simple.  Looking for the best path forward led to the Lab to Market Summit.

When I received an invitation out of the blue asking me to serve as a co-chair for the Summit along with my friend and colleague Diane Palmintera (President of Innovation Associates), I immediately agreed to help.  I assumed we’d just have to moderate a panel leading up to some new policy announcement with a free lunch thrown in for good measure.  I was wrong on both counts.  We were being asked for ideas for improving the federal system– and we had to pay for our own lunch.

We soon received information on innovative programs developed by several agencies geared toward moving more federally funded technologies into the marketplace.  When I asked if the goal was just a critique of these programs, it turned out I had seriously underestimated the target.

Rather, we were to focus on how to improve the commercialization rates from our federal R&D system, considering topics like are commercialization programs meeting stakeholder needs; how can we better leverage agency capabilities, how can we measure success, and better identify what’s not working so well.

Each agency invited one or two experienced commercialization experts from industry, investment, academia, research foundations, etc. to participate.  We were joined by representatives from the White House Office of Science and Technology Policy, and the various research agencies interested in improving their commercialization success rates.  There were no constraints put on us other than those inherent in running a one day meeting with a panel coming together for the first time.

Prior to the Summit, Diane and I worked with the agencies on the agenda to maximize the time for discussion. We settled on starting with quick “elevator speeches” on several innovative federal programs designed to bridge some of the gaps where federal research ends and industry pull kicks in.

After that we went into considering “What’s Working and What’s Not?”  It immediately became clear that this group was not going to focus on tweaking existing programs, but on a more fundamental question:  how can we increase the commercialization of new products, the formation of more technology companies, and the creation of good paying jobs arising from government/industry R&D partnerships?

We established ground rules that there would be no speeches or advertisements, and that everyone was encouraged to speak candidly.  From the first comments we were off and running.  Some fundamental issues quickly surfaced:

  • We need agencies with complimentary research/programs coordinating  to leverage resources to better partner with industry;
  • We need more “technology translators”  bridging the cultural divide separating bench scientists from industry needs;
  • We need more publicly funded technologies taken to a later stage of development so they are more attractive to industry;
  • We need better utilization of venture capital, angel investors, crowd funding, and philanthropic organizations to get more technologies to market;
  • We need to insure that technology commercialization really is a priority of the federal system;
  • We need to remove bureaucratic resistance preventing the full and uniform utilization of the legal tools already provided for technology commercialization.

Despite the problems, it was clear that the federal participants had a very real passion for their programs, and were dedicated to moving forward despite the obstacles.

This passion was matched by the outside expert panel that saw the economic health of the United States depending to a large degree on breaking down barriers preventing the commercial development of federal research.  At a time when our foreign competitors are rapidly closing the gap between us, it is imperative that our $140 billion a year public research system operates at its full potential.

When we asked the panel what should be done, it was impressive how everyone was essentially on the same page.  After papering the room with insightful recommendations, we spent the last hour grouping and boiling them down into broad categories with specific goals.   It was remarkable that in just one day the panel found immediate suggestions for greatly improving the system.  We steered away from the classic Washington formula of just asking for more money, although resources are always an issue. We will soon begin turning our thoughts into a paper for White House and federal agency leaders to consider.

Fundamentally, we need to show that the United States is indeed serious about maximizing the economic impact of the federal R&D system.  If we don’t have the will to change our own systems, we need only look in the mirror to place subsequent blame.

The personal highlight of my day was receiving a White House badge labeling me as an “Expert.”  Unfortunately, we had to return the badges at the conclusion of the meeting.  Fame is fleeting in Washington.

 


About the Author

Joe Allen is a 30-year veteran of national efforts to foster public/private sector commercialization partnerships, and author of numerous articles on technology management for national publications. Joe served as a Professional Staff Member on the U.S. Senate Judiciary Committee with former Senator Birch Bayh (D-IN), and was instrumental in working behind the scenes to ensure passage of the historic Bayh-Dole Act. Joe has served as the Executive Director of Intellectual Property Owners, Inc., a trade association representing major R&D companies, he was involved in the creation of the Court of Appeals for the Federal Circuit, and he also served at the U.S. Department of Commerce as the Director of the Office of Technology Commercialization. From 1992 until 2004, Allen was with the National Technology Transfer Center (NTTC), becoming President in 1997. Clients included NASA, the Department of Defense, EPA, the Department of Veterans Affairs, and the Department of Commerce. Between 2004 until 2007, Allen was the Vice President and General Manager of the West Virginia High Technology Consortium Foundation. In 2008, Joe founded Allen & Associates to continue to facilitate public/private partnerships between universities, federal laboratories and industry.

One comment
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  1. Yikes. There must have been a bunch of govt folks in the room because the only solutions I see you providing are creating more govt agencies, more oversight, more centralized control, etc. Great if you are a govt worker but terrible for business and tax payers.

    Compare to simply implementing a “patent box” tax credit for corporations filing patents and letting free markets take over.

    Trust in the entrepreneurs and free markets – not government.

    You said:

    it’s clear that we could be doing even more to reward the hard earned taxpayer dollars spent on public R&D

    Or, cut public R&D spending and allow corporations&entrepreneurs to fund what they believe in is the future. Free markets, not centralization.

    makes it imperative that we better integrate government funded research into our economy

    Why, who says? Where is your proof that centralization works better than free markets? Did East Germany outperform West Germany? Did North Korea outperform South Korea?

    how can we better leverage agency capabilities, how can we measure success, and better identify what’s not working so well.

    Forget all the government overhead and just trust free markets and entrepreneurs. Go back to what built the U.S. – not what built other countries.

    how can we increase the commercialization of new products, the formation of more technology companies, and the creation of good paying jobs arising from government/industry R&D partnerships

    How about – provide incentives to entrepreneurs instead of paying government workers and agencies to come up with studies and rules+regulations to push on entrepreneurs and small corporations?

    We need agencies with complimentary research/programs coordinating to leverage resources to better partner with industry

    No you don’t. Adding more govt workers, agencies, and rules&regulations just brings the U.S. closer to Greece.

    We need more “technology translators” bridging the cultural divide separating bench scientists from industry needs

    Right, so government agency knows what industry needs better than industry. Give me a break.

    We need better utilization of venture capital, angel investors, crowd funding, and philanthropic organizations to get more technologies to market

    Right, so govt is better at this stuff then free markets and letting the bad VC’s go under.

    At a time when our foreign competitors are rapidly closing the gap between us, it is imperative that our $140 billion a year public research system operates at its full potential

    Foreign competitors like the UK have implemented patent boxes. Canada has reduced corporate taxes to 15%. Both UK and Canada provide tax credits to corporations performing scientific R&D. China is strengthening (not weakening) their patent system and incentivizing patent filing. Examples are endless.

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