President Obama Orders Acceleration of Technology Transfer

With an eye toward creating new jobs and improving the economy, the Obama Administration wants to expand the ability to quickly and efficiently transfer science and engineering breakthroughs from the laboratory to the commercial marketplace.   To accomplish this goal, earlier today the Obama Administration announced two new initiatives to help U.S businesses create jobs and strengthen competitiveness in the global economy.  The new initiatives continue a week long theme where President Obama has showed a willingness to take whatever executive action he feels he can in order to attempt to spur job creation.

This latest set of initiatives will take steps to speed up the transfer of federal research and development from the laboratory to the marketplace, and it will create BusinessUSA, a one-stop, central online platform where small businesses and businesses of all sizes that want to begin or increase exporting can access information about available federal programs without having to waste time navigating the federal bureaucracy.

Is this a good idea?  Yes, I think so.  Will this work in any relevant time frame to create new jobs?  I doubt it.  There is too much work that needs to be done, you cannot mandate the speed of innovation and many universities have a rather myopic view of their role within the technology transfer cycle to suggest that an effort like this will yield any results over the short-term.  It is, however, something that should be undertaken.

So what exactly with the actions of President Obama mean?  Today’s Presidential Memorandum directs all federal agencies with research facilities to accelerate the timeline for placing federally funded innovation into the marketplace in three ways:

1. It directs agencies to streamline and accelerate the process for private-public research partnerships, small business research and development grants, and university start-up collaborations.
2. It gives agencies more flexibility to partner with industry, encouraging them to create new partnerships with local communities, support the growth of regional innovation clusters, and share laboratory facilities with local businesses, among others.
3. It will institute more accountability by directing agencies to develop a five-year plan with concrete goals and metrics to measure progress, including keeping track of how many patents each lab is generating.

Interest in technology transfer was signaled earlier in October when the President’s Jobs Council issued an interim report that suggested what was referred to as “open source innovation,” which would allow researchers to shop their innovations around to any technology transfer office of their choice.  This was not a very well thought out plan because of the thorny ownership issues involved, as well as the fact that it would wreak havoc on the uniformly heralded Bayh-Dole Act, which is responsible for the enormous growth of federally funded researching getting into the marketplace since 1980.  See Jobs Counsel Seeks Open Source Approach to Tech Transfer and Shooting Ourselves in the Foot.  Thankfully, this technology transfer related executive action does not appear to have adopted the suggestions of the Jobs Council.

In order to facilitate this Presidential directive, the United States Patent and Trademark Office (USPTO), in collaboration with the National Science Foundation (NSF), will pilot a program to provide Small Business Innovation Research (SBIR) awardees with comprehensive intellectual property support through the agency’s small business programs and resources.  The Small Business Innovation Research (SBIR) encourages domestic small businesses to engage in Federal Research, Development and Commercialization through a competitive awards-based program that enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization.

“For many small, innovative companies, the ability to grow, hire new employees, and compete effectively in the global marketplace hinges upon securing patent and trademark protection,” said David Kappos, Under Secretary of Commerce for Intellectual Property and Director of the USPTO. “Patents have become increasingly vital to securing the financing and investment needed to build and scale businesses.”

Since the launch of the Small Business Innovation Research Pilot Program earlier this month, USPTO says it has provided educational services through its Global Intellectual Property Academy (GIPA) which will begin offering monthly webinars covering a broad array of IP topics. Aside from mention in a press release, however, there is no information about this SBIR pilot program seemingly available on the USPTO website.

Clearly, the Obama Administration feels that accelerating the timeline to get federally funded research into the hands of the marketplace will help start-ups and small businesses will create new technologies, create new jobs and grow the economy.  This is all well and good, and a more streamlined innovation cycle is certainly laudable, but I can’t help but wonder exactly how this will actually be accomplished.  I worry that politicians desperate to see a stagnant economy grow and add jobs will believe that by waiving a magic wand, virtual or otherwise, usable technology will more quickly get into the hands of start-ups and other job creators.  I just don’t think it is going to happen that way.

I don’t mean to rain on the parade, and I am all in favor of any innovation initiatives that make sense.  I personally think the best way to streamline the innovation cycle would be to adequately fund the Patent Office, thereby allowing them to hire enough examiners to plow through the backlog.  That debate was lost, the Patent Office now has more work and less funding thanks to the America Invents Act.  But even if the USPTO could get proper funding a turn around wouldn’t happen overnight.  Patent examiners would need to be trained and realistically if the USPTO could be run as it should be we would be at least several years away from getting back down to the 18 month average pendency that everyone agrees is the appropriate standard.

The trouble with any initiative isn’t that it is a bad idea, but rather that it will take time.  Expecting a streamlining to occur in the technology transfer sector in any meaningful time frame to assist out of work Americans during this recession/recovery is naive.  To think otherwise is to fail to understand the innovation cycle, and particularly the federally funded innovation cycle.  At best these efforts will lead to a more vigorous recovery once we are already well on the path to recovery.

In May 2010 I interviewed Linda Katehi, the Chancellor of the University of California (Davis).  Katehi is herself an electrical engineer and former professor/researcher who is well acquainted with technology transfer.  Katehi explained to me that many Universities do not properly invest in technology transfer and instead see technology transfer as a vehicle to return funds quickly, rather than viewing the licensing out of University innovations as a long term endeavor.  This is a critical problem with university based technology transfer.  Technology transfer offices are under staffed and over worked.  Getting federal funded research out of universities quicker is no great mystery, but it will require magic if technology transfer offices do not receive the level of support necessary to actually carry out the tasks demanded.  You simply cannot say “do it faster” as the President has done and get anywhere without fundamental systemic changes.

Chancellor Katehi explained the current model employed by many, if not most, universities through the Power Point slide below.

It should be immediately recognized, however, that there is no break-out of time on the timeline.  That is because you can never know what time it will take to get federally funded technology to the point where it will be useful for companies.  This is because the federal government funds highly speculative research that would not otherwise be undertaken by the private sector.  This funding of basic science has always been the role of the federal government.

Once a scientific pursuit starts to show promise then additional research is done.  As time progresses this additional research is of a more practical, commercial nature.  Essentially, you must translate basic research into something relevant and useable.  The closer universities can get to usable research the more valuable it is for start-up companies and small businesses.  But when one is licensing federally funded innovation from a university you are not licensing a plug-and-play technology.  You measure in years, perhaps anywhere from 1 to 10 years, the time it will take for the licensee to have a useful commercial product.

If you understand the reality that from basic discovery through translational research to private sector takes a great deal of time you understand the problems facing the Obama Administration relative to speeding up the timeline as they wish to do.  This is not to say that President Obama shouldn’t be doing this.  At first glance this seems like a great initiative.  Having said that, I see no likelihood that the fruits of this endeavor will at all be seen in the economy before Election Day 2012.  I also have doubts that any meaningful or tangible benefit will be felt at any time during a possible Obama second term.  Yes, we need to pursue this path, but this is not a magic bullet.  The pace of scientific discoveries and the translation of those to be useful to the private sector cannot be rushed.  But the technology transfer sector can certainly be improved, streamlined and better staffed in order to achieve the President’s goals.

Breakthroughs in science and engineering create foundations for new industries, new companies, and new jobs.  This is undeniably true.  The question is how do we unleash this engine of growth?  I am in favor of streamlining the technology transfer process, but I believe that it needs to begin from within.  Universities have to revise the view of their appropriate role.  Universities are not supposed to be in the business of technology transfer to make money, but rather to facilitate the development of exciting new innovations while training the next generation of engineers and scientists.  By developing exciting new innovations and then placing them into the private sector the University plays a vital role in the innovation economy.  Under-funding and over-working technology transfer departments is counter-productive.