The Government Entrepreneur’s Dilemma   

By Joseph Allen
June 19, 2018

Until there are meaningful rewards for transforming federal laboratory discoveries into useful products, tech transfer will remain little more than window dressing.

Image Source: Deposit Photos.

I got the news that EPA’s Water Technology Innovation Cluster was dead during the webcast of the final public meeting of the Administration’s ROI Initiative. About two hours into the program a speaker mentioned it during his three-minute statement. The two of us may have been the only ones listening that knew about this project.  Just a few years ago I’d called it a “model technology transfer program.”  Now it was gone, taking down several public-sector entrepreneurs with it.

The broadcast presented a series of thoughtful recommendations on how to improve the taxpayer’s return on investment in federally supported R&D.  But the news underscores a critical question. Despite all the laws, presidential statements, departmental orders, speeches, etc. is the commercialization of technology really a priority in government agencies?  Many times, the answer is “No, that’s not our mission.” And those who believe otherwise often pay a price.

So, if you’re a taxpayer or think protecting water is a demonstrable public good, take a second to mourn the passing of a program with a shoestring budget that punched well above its weight. It died because it was viewed as more of a threat than a benefit to its agency.

When we think of government/industry collaborations, the Environmental Protection Agency probably doesn’t come to mind.  Known chiefly for its regulatory responsibilities and industry oversight, it’s not what many companies view as an ally.  But there’s another side that’s largely hidden from view.  Despite its small budget, EPA’s Office of Research and Development performs cutting edge basic and applied R&D in its national centers and laboratories.  That’s particularly true when it comes to clean water.  Much of this expertise resides at the Andrew W. Breidenback Environmental Research Center in Cincinnati, Ohio.

Cincinnati is a natural innovation hub because of its geography. Hundreds of miles of rivers and streams meet there forming a 1.5 trillion-gallon aquifer.  The region has more than 6,000 scientists conducting nearly $4 billion in water related research.  Protecting global water supplies is one of the most pressing needs of humanity so developing effective technologies is a tremendous opportunity for innovative companies. The EPA test and evaluation laboratories and facilities can mimic conditions new water technologies face anywhere in the world to see how they perform.  Combining these assets through industry partnerships would spur regional economic development while helping EPA fulfill its mission.

Recognizing the potential, one EPA lab director commissioned a study to look at the possibility of forming the “Water Technology Innovation Cluster.” The plan was promising and worked its way up the chain of command. Eventually $5 million was scraped together from the agency research budget. Complimented with a contribution from the Small Business Administration, the project launched. Both the EPA and SBA Administrators attended the opening ceremony.

A few years later I was asked to review the program.  Several days were spent interviewing stakeholders for candid assessments on how things were working.  That was a real eye opener. I’d worked with EPA before while leading the National Technology Transfer Center. We’d done an analysis of their patents and research capabilities and came away impressed. However, getting licenses or cooperative R&D agreements (CRADAS) through the agency process was difficult.

After the first few interviews it was evident that something significant was happening.  The Cluster helped form an association of local companies and water utilities to get an industry driven list of needed technologies and potential partnerships with EPA.  Part of the Cluster’s budget was then used as a small gap fund to bring several promising lab inventions a little further down the pipeline.

In just a year and a half, the Cluster had:

  • Formed 13 CRADAS;
  • Completed 2 licensing agreements;
  • Filed 6 patent applications and 3 provisional patents; and
  • In just one-year, increased industry in-kind CRADA contributions 250%– from $1.500,000 to $4,000,000.

While these numbers may not seem like a big deal at NIH, for the Environmental Protection Agency they are impressive.

While I talked with lab managers, the interviews which really hit home were with EPA’s scientists. Their names were not revealed so they could say what they really thought. Everyone cared passionately about their research and strongly believed in EPA’s mission.  But they were frustrated it was so hard to get their discoveries out of the lab, so they could be utilized.  Other than the Cluster, there was little encouragement to patent their inventions or commercialize the technology. Tech transfer had been a tax on their time and budgets with little benefit.

Several said they’d heard many speeches, but nothing ever changed.  For the first time they felt hope that things were finally getting better and asked if I thought it would last.  All I could say was that I would honestly report my findings.

The input from industry was equally blunt. One small company owner said that in his prior attempts to work with the lab he encountered a “slow, inflexible and very passive approach” to tech transfer, but when he approached the Water Cluster their immediate reaction was: “Let’s make it happen.”  An executive from a large municipal water utility said his partnership helped find a smart water technology which was “one of the best products I’ve ever seen.”

The Cluster also gained national attention. The Federal Laboratory Consortium presented it with the State and Local Economic Development Award and gave its leader TheLaboratory Director of the Year Award, the first time these prestigious awards had been given to one program.

My report said the Cluster was precisely the type of initiative that Congress, the President and the EPA envisioned through the various technology transfer laws, policies and directives and it should be supported.

EPA had centralized its technology transfer office in Washington to save money.  No matter how well intentioned, you can’t effectively broker deals from 1,000 miles away. I recommended that the Cluster be strengthened by giving it deal making authorities as envisioned by the Federal Technology Transfer Act. I also suggested that the program be funded to pay patenting costs as they were currently deducted from the research budgets. Both ideas were geared toward making the project a service to the other labs rather than a cost.

But the Cluster’s fate was already sealed.

In “have not” agencies like EPA, budgeting is a zero-sum game.  The Cluster’s money had been scraped together from other research programs.  As soon as its headquarters champion left, the knives came out.  The opportunity to strike came during the transition between administrations.  The Cluster was stripped of its funding.  Its leaders were buried deep in the bureaucracy. An unmistakable message had been sent.

To learn this while listening to a public meeting on improving the return on investment from our federal laboratories was stunning. I can’t be angry with the middle managers who killed the Cluster. To them it was a threat, taking dollars away from their research agenda in an agency with a constantly shrinking budget.  No one seems to have thought that the way to turn this around is to show that their R&D creates new technologies that grow the economy while protecting the planet.

Ironically, now that the Trump Administration’s prioritizing economic as well as scientific returns on investment from federal research, one of EPA’s best examples is gone.  It brings to mind the cry of Napoleon’s minister on learning a long-term benefit was thrown away for short term expediency: “This is worse than a crime, it’s a blunder.”  But so far, the price was paid by those who believed that technology commercialization really was an agency priority.

Others who share this faith are waiting to see what becomes of the Administration’s ROI initiative. One thing’s for certain, it’s going to take more than lofty pronouncements to steer this ship in a new direction. Until there are meaningful rewards for transforming federal laboratory discoveries into useful products and penalties for those blocking the way, tech transfer will remain little more than window dressing.  With the Chinese right on our heels, that’s a luxury we can no longer afford.

It’s time to end the government entrepreneur’s dilemma so they can get to work.

The Author

Joseph Allen

Joseph Allen is a Featured Contributor on, and 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. He is our resident Bayh-Dole expert, and will write frequently about Bayh-Dole and issues surrounding the commercialization of university research.

In 2008, Joe founded Allen & Associates, through which he offers consulting services assisting clients in technology transfer issues, including developing effective communication strategies with national policy makers.

Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of Read more.

Discuss this

There are currently 8 Comments comments.

  1. Jianqing Wu June 19, 2018 11:11 am

    Great issue! This is just one story showing the disfunctional federal government.

    “Ironically, now that the Trump Administration’s prioritizing economic as well as scientific returns on investment from federal research, one of EPA’s best examples is gone. It brings to mind the cry of Napoleon’s minister on learning a long-term benefit was thrown away for short term expediency: “This is worse than a crime, it’s a blunder.” But so far, the price was paid by those who believed that technology commercialization really was an agency priority.”

    However, I will add that technology transfers are blocked in both ways. If you claim you have inventions that can double research returns for the federal government, it is Blind, Deaf, or Dead. All federal government agencies even do not have any public channels to explore and use outside new technologies to double their returns!

    The root problem is that government designers think they can design the system to address everything issue. They did not know that their vision is so limited and their designed system is BDD.

  2. Benny June 20, 2018 5:23 am

    Twice in the article the word “scrapped” was used when “scraped” was meant. In respect to a budget, the two words have opposite meanings.

  3. Joe Allen June 20, 2018 10:06 am

    Benny: good catch, my mistake.

  4. Gene Quinn June 20, 2018 10:51 am

    Change made to reflect Joe’s meaning. See Comments 2 and 3.

  5. Anon June 20, 2018 11:13 am

    When the larger zeitgeist has been so anti-patent, why would anyone be surprised at the type of development shown in this story?

  6. Jurgen Vollrath June 20, 2018 2:21 pm

    Thank you Joe – great article!
    The problem of extracting ROI from Fed funded programs runs even deeper and affects all research universities. If you look at TTO’s attempts at implementing the Bayh-Dole Act, the results are pretty dismal – the occasional large pharma application that makes the news, but generally they are barely breaking even. I contacted numerous university TTOs around the country with proposals of supplementing their licensing program by adding an outsourced element – commercializing their ideas by capturing and packaging technologies worldwide to define viable commercial solutions. The result was the same every time: a general paranoia about job security. It is difficult to turn a ship around and adopt a new and better approach when the decision makers feel threatened – they’d rather continue down the same road of poor returns than have a private entity possible show the flaws in the current TTO process.

  7. Anon June 20, 2018 5:43 pm

    Mr. Vollrath @ 6,

    I find your view sad and sadly all too common. Not that it is sad that you express the view, but rather, sad that your view resonates so deeply. We truly are missing out – and “we” being the Royal “we.”

    I do hope (along the lines of my comment at 5) that the narrative of patents can be turned around from the pervasive “patents are bad” as fostered by the Efficient Infringers, and as publicly expressed by Mr. Iancu.

    To get there, we ALL (Efficient Infringers included) need to recognize that the greater good is through a path of strong patents.

  8. Jennifer Gottwald June 22, 2018 11:10 am

    Joe, Thanks for this. I noted the comment during the webcast and meant to look it up. You’ve saved me the trouble through your thoughtful summary. This really highlights the need for all of us to submit information to the NIST ROI RFI – the more we can add to the process, the more likely successful programs like the one noted can be made a priority.