The Big Business of Research: Research Universities Are Finding New Ways to Leverage Their Intellectual Capital

By Schachter, Ron | University Business, May 2007 | Go to article overview

The Big Business of Research: Research Universities Are Finding New Ways to Leverage Their Intellectual Capital


Schachter, Ron, University Business


YOU COULD EASILY miss the small office suite as you travel the bare fourth-floor corridor in an all-concrete building on the MIT campus--were it not for the dazzlingly blue wall around the next corner announcing the DuPont-MIT Alliance (DMA).

Alongside a bright logo stand several huge color photographs of breakthroughs to emerge from the seven-year university/ corporation partnership. One shows a shiny silver metal and glass cylinder fermenting ethanol fuel from yeast. Another provides a blown-up view of a high-tech "liver chip"; it allows scientists to test the toxic effects of chemical compounds on liver tissue.

In a well-worn lab one floor below, Robert Cohen, a chemical engineering professor and DMA's associate director, stares through plastic goggles at a contraption about the size of a large microwave oven. The robotically controlled "dipping machine" allows him to cover glass slides with layers of ultrathin coatings for potential new products, from fuel cells to self-cleaning windows.

For all of its modest surroundings and microscopic outcomes, DMA has become the Next Big Thing at a university that over the past 60 years has practically written the book on working with industry. "This is another animal altogether," Cohen says. "We've never had anything on this scale and with this systematized an approach."

U.S. universities have long collaborated with companies, from automakers to drug makers. But in an era of dwindling government and foundation funding--and with the increased opportunity they've discovered in the private sector--higher ed leaders have been ratcheting up their relationships with corporations. They're also changing the way they're doing business, from redefining their partnerships to expanding their professional services to revising their long-held approach to intellectual property.

A Growth Spurt

It's all for good reason. University research has become a big business. In an annual survey of 228 universities, AUTM, The Association of University Technology Managers, found that in FY2005, respondents received a total of $42.3 billion in research funding. Of that total, 7 percent--a record $3 billion--came from industry.

These institutions also reported more than 28,000 licensing agreements for intellectual property that generated over $1 billion, they introduced more than 500 new products, and they flied 15,000 patent applications. Thinking in terms of a five-day workweek, that means nearly two new products were introduced and close to 58 patent applications were filed per day. How's that for productivity?

Starting in 1980 with the federal Bayh-Dole Act, the profitability of university-based research has been growing. The act allowed nonprofit schools to retain the title to any innovations generated in their laboratories through federally funded research.

Karl Koster, director of MIT's Office of Corporate Relations and its Industrial Liaison Program, points to another seismic change a decade later--the trend of corporate restructuring. "With the downsizing during the 1980s and '90s of their own research departments, a lot of companies have looked at what is the role of knowledge centers"--so much so that they have outsourced about 20 percent of research and development. Over that time, the number of companies with which his office works has risen to 200, and their funding of MIT research has ballooned from $60 million to $100 million annually. That's nearly 17 percent of the school's research budget.

MIT isn't alone, and other research institutions have been chasing the same R&D dollars. Koster says, "The level of competition has gone up. A lot of universities--including foreign institutions--are looking to develop relationships with industry. They all see the major economic impact that research universities can have regionally and nationally."

"Over the years I've watched these places learn from how MIT has worked with industry," agrees Cohen. …

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