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INVENTING

Five Universities You Can Do Business With

Smart schools resist the temptation to treat every new idea like it's the next Google.
University of California, Berkeley

David McNew/Getty

University of California, Berkeley

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To look in on university research is to see the subatomic structure of modern entrepreneurial capitalism. Through a process called technology transfer, academic researchers patent their work, then license it, often under a royalty agreement, to companies that ultimately bring the innovation to market. Many of the great breakthroughs of the past 30 years--in fields such as computing, telecom, the Internet, and fiber optics--were first conceived in a university lab.

Despite the traditional symbiosis between markets and academia, however, university research is not flowing today as fast as it should to entrepreneurs who are eager to embrace and exploit new ideas. Only a handful of universities produce a steady stream of inventions with commercial potential. Fewer still have a track record of working well with businesses to bring these ideas to market.

Just five schools, in fact, constitute the elite of the technology transfer world. They are Berkeley, Caltech, Stanford, MIT, and Wisconsin. The list of universities reporting new discoveries changes from one year to the next, but each of these five schools consistently garners around 100 patents per year.

Not every patent becomes the basis of a business, of course, but some do. And what is remarkable about the five schools above is that, in addition to producing new ideas, they consistently rank at the top of the list of universities in terms of how many businesses are built around technologies created in their labs. Along with teaching and doing research, they seem to be in the business of inventing companies. In contrast, many schools with great research reputations never seem to turn anything into a business. The university with the biggest research budget in the United States, Johns Hopkins, fosters very few new ventures.

So what do the prolific schools do that's special? First, they treat businesspeople as allies and equals. Researchers at these schools are generally open to and ready for interaction with companies (even start-ups) so long as the entrepreneurs are capable and serious. They also encourage students to think about the business potential of their academic research. Faculty support is vital because students are in a better position than tenured professors to follow an idea out of a lab and to a start-up.

Administrators at the Big Five play their part in nurturing tech transfer by resisting the temptation to monitor and regulate business relationships aggressively. At some schools, every new idea is greeted as if it is sure to be the next Google. The university bureaucracy fights to protect every ounce of intellectual property, thus discouraging outsiders from partnering with researchers.

This mindset is purely the product of inexperience and greed. Entrepreneurs will naturally think twice about working with academic researchers if the possible reward of commercializing a technology is curtailed. The smart schools understand this. They also understand the key role that outside investors can play when it comes to financing innovation. At Stanford and MIT, a community of investors has essentially been welcomed onto campus. Businesses built around university ideas find the route to venture funding and angel capital is short and well traveled.

Mindful of the gap between the tech-transfer rich and poor, a few institutions--Texas, Illinois, Carnegie Mellon, Georgia Tech, and Arizona State among them--have revamped their policies. Entrepreneurs can promote reform at other universities by educating the academics about ways to facilitate tech transfer. Most universities are eager to work with local employers to place graduates. This presents a golden opportunity to build bridges with the school and to find out what magic is happening in its labs.

Entrepreneurs can also use their influence as parents to change minds. If you have a child in college, ask the deans and department heads about the school's record of tech transfer, whether there is a technology incubator or industrial park near campus, and so on. If university administrators are asked the same question over and over, you can bet that, eventually, a few smart Ph.D.'s will be dispatched to come up with the right answers.

Carl Schramm is president and CEO of the Ewing Marion Kauffman Foundation in Kansas City, Mo., and a contributing editor.

Last updated: Feb 1, 2006




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