Research Universities, Technology Translation, and Entrepreneurship
Bio International Convention, Boston, Keynote Address
by Robert A. Brown | June 18, 2012
Thank you for the kind introduction and for the opportunity to speak today about a topic that is very important to the economic health of the country and the important role of the American research university in it. When we speak about translational research we speak about the process of taking discoveries that are made principally in academic research laboratories and translating these to products and services that create value for society, through public good, commercial viability, or both.
Presidents of research universities, like me, love to boast about the inventions spawned by their institutions and the new companies that have been created by their faculty and students. There are even a few institutions that will actually talk about the positive net revenue from licensing and start-ups; most do not, because the net revenue is either meager or negative. Instead of starting with this approach, I would like to talk first about the concept of technology creation within universities, how it has developed over the last half-century, and the fundamental issues that we must manage if universities are going to become more involved in value creation.
As you will see as I develop my remarks, it inevitably becomes a discussion of institutional values, the motivation of faculty and students, and how policies and processes put in place within the institution influence the interface with the world of large corporations, start-ups, and venture capitalists.
First, when we talk about translational research in research universities, we are talking about the laboratories and offices of faculty members. Faculty members who rise every morning—if they sleep at all—to work with graduate students, postdocs, and professional staff to do research that defines their contributions to science and technology and that, within the promotion and tenure and reward systems of their institutions, sets their professional future within the university.
I believe I understand the role of a research faculty member, as I am not so far removed from this world that I can’t remember the energy and excitement of working with my own research group, the effort of writing technical papers, and the stress caused by submission of the grant proposals needed to fund my research group. My own research was in the area of modeling of materials processing, especially for polymers and single-crystalline semiconductors. I will draw on some of this experience in my talk, not because these are directly applicable to yours in human health, but because there are some common themes that are independent of the area of application.
We should recall that the American research university is, by its nature, the domain of the independent entrepreneur, both intellectually and financially, analogous in some ways to a collection of tribes. Beyond the support given to new faculty members for starting up their careers and the much rarer support directly from the university for particular research areas, running an academic research laboratory is a “hunter-gatherer experience”—you simply eat what you kill. Your research ideas, expressed through peer-reviewed proposals to federal agencies or collaborations with companies, and your research reputation, built upon your results and your publications and presentations, lead to the funding and the sustainability of your laboratory. Your research tribe thrives if you produce important results, and starves if you do not. The role of the principal investigator/faculty member is to guide this effort, bring the very best people to the laboratory, and bring home the grant money, the proverbial dead buffalo for my tribal analogy.
I begin with this description of the faculty researcher to frame the discussion of translational research because she or he is the elemental unit around which this hinges. The faculty member must be interested in research translation; if not, nothing else matters. So, it is the context in which these faculty members work, their ability to create and fund their research environment, and their motivations, biased by the policies and aspirations of the institution, that is at the heart of the discussion of translational research.
How did we get to where we are today? It is important to have a bit of a historical context for our university research enterprise. One of the most important developments to come from the end of World War II and the beginning of the Cold War was the commitment of the United States government to support significant research—both basic and applied—through competitively allocated research funding. The story of how this developed is laid out in a number of places. I highlight an important reference that I will use, Pasteur’s Quadrant: Basic Science and Technological Innovation, written by the late Donald Stokes in 1997.1
Stokes tells the story that unfolded at the end of the war when Vannevar Bush, from MIT and the wartime director of the Office of Scientific Research and Development for the U.S. Government, filed a report that was commissioned by President Roosevelt. The goal was to outline the role of science and research in peacetime. Bush’s report, written on the heels of the wartime success of inventions such as radar and the atomic bomb, seized the moment to push hard for fundamental science. The report, Science—The Endless Frontier,2 advocated for investment in basic research, which the report defined as “research performed without thought of practical ends.” The report went so far as to say that applied research had the very negative consequence of driving out pure research and advocated forcefully for the government to support “pure research” above all else.
The report also supported the traditional linear model of research translation—basic research separated from applied research, followed by development and, finally, commercialization.
And with this approach, the separation of science and technology was born. The Bush report was extremely successful in building government investment in research and the creation of the National Science Foundation. The technological successes of World War II really guaranteed that this would happen; however, the linear view of the relationship between basic discovery and technological development unnecessarily fractionated what we view today as, in many cases, a tightly integrated process.
It is interesting that, in the decades after the report, large corporations even mirrored this separation in the structure of their research laboratories, and famous industrial laboratories like the Watson Laboratory of IBM, AT&T Bell Laboratories, and the Experimental Station of DuPont thrived.
The linear view of the translation from basic research to commercialization also helped universities compartmentalize thorny issues. These issues include conflict of interest, balancing commitment of faculty, student, and staff time between the university and outside business concerns, and dealing with proprietary research results in what was an atmosphere of free and open inquiry. The linear model makes managing these potential conflicts very easy, as the university is envisioned as operating only at the beginning of the process—preferably in basic discovery and occasionally in applied research, and not in actual development. For decades, universities have taken pride in using this approach to minimizing or eliminating such conflicts, not managing them.
And this approach has much merit as the openness of research within a university and the commitment of the staff and students to the institution are essential principles to the educational environment and meritocracy of a modern research university. To make this point, let’s think about one issue that comes up often, the openness of research. Think about this from the perspective of optimal graduate student education. In the very best, most vibrant doctoral programs there are seminars for open presentation by graduate students of their results, complete with give-and-take between faculty colleagues and other graduate students and research staff. Do we hinder this process, which is critical to training, because the research in one laboratory or another is proprietary? This won’t work, or else the department will become a collection of segregated research organizations and offer no collective educational value. This argument has its roots upstream of the translation process, before anyone considers publications, technology disclosures, or patents. One can quickly conclude that segregation of research results based on proprietary sponsorship in this environment is no more viable than segregation of access to research based on nationality for international graduate students.
The importance of intellectual property in the discussion of academic research did not really come to the forefront until the 1970s and was formally incorporated in the policies and practices with the Bayh-Dole Act of 1980, giving universities, as the grantees for federal awards, the clear intellectual property rights and the responsibility to move the inventions supported by federal awards to those who would commercialize the inventions. Coupling the linear model for translation with Bayh-Dole solidified the classical view of technology transfer: Take a university discovery, file a disclosure and a patent, and market the discovery to the private sector in the hope of finding an interested party.
By and large, this was the norm until the end of the Cold War, even as many industries restructured to do away with pure research and focus almost exclusively on product discoveries and development. Still today, much of the research supported by the federal government and performed in our universities fits within the linear model.
What has changed? First, there is definitely a rise in the sentiment around public accountability. The technological victories of the past don’t seem to give license for unquestioned continuation of research support in the future, especially when discretionary spending is as tight as it is now. But perhaps the most important shift has been the recognition of the dominance of research universities as the innovation engine for the country. In the last decade this sentiment has increased considerably as the United States comes to grips with the importance of technological innovation in protecting our economic leadership and our quality of life. The intensity of the new competition can be measured in any number of ways, but perhaps the longest-range indicator to look at is the creation of new doctorates in engineering and science in China and the European Union as compared to the United States (see Figure 1); here is the data as a ratio from 1975–2010. The rise of intellectual capital in China is very clear and when taken together with the increased focus on intellectual capital in other countries, such as Singapore, South Korea, and now India, one can see the emergence of the new economic battleground.
Figure 1: China and European Union production of science and engineering doctorates relative to the United States: 1975-2010. Taken from Rising Above the Gathering Storm, Figure 9-2, 2007.
This figure is taken from the very influential report from the National Academies, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future,3 published in 2007. This report and its follow-on, Rising Above the Gathering Storm Revisited,4 published in 2010, persuasively make the case for increasing the national investment in research in our universities.
The shift to seeing research universities as being at the heart of the innovation engine of the country and the call for increased public accountability put a bright light on translation from universities to practice. The final piece of this paradigm shift also started in the 1980s and was the proliferation of venture capital firms and the idea of seeding financial support for faculty members and graduate students who want to take their inventions and become entrepreneurs. Instead of simply filing disclosures and patents and leaving it to the technology licensing office to see who wanted to pay licensing fees, faculty members began starting their own companies. Surely, this process has been going on forever at some scale and there are faculty-pioneered companies started long before the 1990s, but there is no comparison with the scale of the investment and interest today.
I believe that the interest of the faculty in being involved in the downstream part of the linear translation model is the reason most responsible for changing the paradigm on university campuses.
Before I talk further about the challenges and opportunities involved in the evolving research translation model, I want to emphasize an important point. Make no mistake; the American research universities built on the system proposed by Vannevar Bush are the envy of the world. For all the ills of the educational system in the United States, the system of research universities, both public and private, is one of the great assets of this country. Our system has enormous strengths, including:
- Competitive funding for research,
- Empowerment and critical judgment of young faculty through the promotion and tenure systems, and
- Market created by the system for the brightest graduate students and most productive faculty members
Equally important, the research environment is integrated into the fabric of our universities and their graduate and undergraduate education missions in ways that have not been the case in other societies.
Boston University is a typical model for an American private research university. Although we came late to the research university world, with less than $13 million of externally sponsored research in 1971, today our faculty leads over $400 million of research sponsored on our Charles River and Medical Campuses and in our major teaching hospital, Boston Medical Center. We have leading graduate programs in many disciplines, including one of the nation’s foremost departments of biomedical engineering with strong collaborations between medicine and engineering.
Figure 2 shows the growth of the externally funded research volume coming directly to Boston University. Our growth mirrors the transformation that has occurred in this country created by the federal research enterprise: the transformation from a group of institutions focusing strictly on undergraduate and professional education to institutions that train some of the finest graduate students in the country and contribute to the nation’s innovation engine.
Figure 2: Boston University sponsored program awards fiscal year 1971–2010: in millions of dollars.
Today, you see other countries, such as China, Korea, and Singapore, working to duplicate many of the aspects of our research university system, although this is difficult without a commitment to establishing a true meritocracy for faculty and students alike. (For those of you interested in understanding the history of the American research university, I recommend to you the book The Great American Research University5 by Jonathan Cole.)
Although there is much to be proud of, my guess is that most people here today believe that we have a lot of room for improvement. And to start, the linear model for research translation is at best economically inefficient, but at worst inaccurate with respect to a large portion of important research. This is the case Donald Stokes makes in Pasteur’s Quadrant where he argues that, historically, the linkages between application and inquiry are much more interwoven than the linear model suggests. As the title of his book implies, he took a two-dimensional approach as shown in Figure 3, with axes defined by the degree of the quest for fundamental understanding and the importance of the consideration of use. In this diagram, applied research sits in the lower right quadrant and pure basic research in the upper left, with use-inspired research occupying the upper right of Pasteur’s Quadrant, named for the famous microbiologist whose quest began with the production of alcohol from fermenting beet juice, and that led to the beginning of the field of microbiology, which definitely was both fundamental and goal driven.
Figure 3: Pasteur’s quadrant: taken from Pasteur’s Quadrant: Basic Science and Technological Innovation, 1997.
For this talk, it is appropriate that Louis Pasteur is the namesake, but it could have been named for someone in almost any discipline, as historically many important discoveries were driven simultaneously by the use and the science.
If we agree that we aspire for more academic research to occur in Pasteur’s Quadrant, what must we do to make this happen? I will break down the challenges for research universities into four categories:
- Emphasizing research in Pasteur’s Quadrant.
- Finding sustainable funding for this research.
- Smoothing the interface for translation to the private sector.
- Preserving the academic research environment while emphasizing translation.
Emphasizing Research in Pasteur’s Quadrant
I believe much has already changed both in regard to exposure of faculty to the most relevant research problems and in the way federal sponsors support research, so as to bias faculty toward working in Pasteur’s Quadrant. And federal support is the most important part of making this happen.
As the report Rising Above the Gathering Storm discussed, the trend in industry is to invest less in basic research, so that this activity is increasingly left to the government to fund. To give you a scale for these activities, in 2008 about 43 percent of the $68 billion worth of all the research—both basic and applied—supported by federal agencies was performed at universities. Focusing federal support on shorter-term translational research is counter to this mission.
However, government policies alone do not control the inclination of faculty to change their research focus. A legitimate question is whether the promotion and tenure systems in our institutions support this change. Do young faculty really pursue risky, paradigm-shifting research or does the pressure to raise money and “publish or perish” direct them toward safer, more incremental research projects? Do faculty members get sufficient credit for the impact of their research on application and commercially viable products and services? For example, you may have read the recent announcement by a major university to begin counting patents in promotion evaluations.
These are questions that people have been asking for as long as I have been a university professor. My only insight into the answers is that it is a false calculus to talk about whether journal papers or patents count more in a promotion case. The question is whether the investigator has established a research reputation among identified leading experts in the field, either in basic research or product development, as an emerging and innovative leader. The key here is the input from acknowledged leaders, either in universities, companies, or government laboratories, that candidates meet this expectation. Simply counting anything, whether it is research dollars, papers, or patents, is no substitute for expert input and decision making.
Finding Sustainable Funding for This Research
In my experience, nothing is more motivational for a faculty member to work in an area than identifying a source of stable research support. To push work in Pasteur’s Quadrant, the federal agencies have explored many models, from research centers focused on more narrowly defined topics with mandatory industrial consortia, such as NSF’s Engineering Research Centers, to specific translational programs meant to perform pre-competitive research aimed at speeding the discovery of new therapies; the Clinical Translational and Science Institutes established by the NIH are this type of model. The CTSIs form a network of organizations focused on finding new ideas for diagnostics and therapies for diseases with understood molecular mechanisms and for identifying targets for diseases with unknown mechanisms.
Boston University has a vibrant CTSI led by Dr. David Center. One of the unique features of our CTSI is a program of bioinformatics to develop tools for interrogating existing human genomic data for similarities between data from cell lines that are treatable with an existing drug. The open-access tool OpenSESAME, developed by Professors Avrum Spira and Marc Lenburg in the School of Medicine and their student Adam Gower from our interdepartmental bioinformatics program, downloads all existing human RNA array data into a single source and normalizes the data, permitting the interrogation.6 Its application already has led to ideas for using an existing drug, developed to treat seizures, to treat triple negative breast cancer. Several other exciting targets also are being explored. This research is a great example of government-funded, use-directed research.
Let me give you another example of a federal agency-inspired program that shows the power of collaboration. For over a decade Boston University has invested in establishing a world-class interdisciplinary research center in photonics, which emphasizes the generation, emission, transmission, and detection of light for a host of applications. Starting originally with defense applications, an outgrowth of the Photonics Center has been the emergence of biophotonics—the coupling of biology with photonics—as a significant strength of the center.
This is our part of the equation. The next piece in the puzzle is the NSF program for Industry/University Cooperative Research Centers, or I/UCRC, which offers relatively modest core funding for efforts to bring universities and industry together around focused research themes. Boston University joined with the University of California at Davis to form the Center for Biophotonic Sensors and Systems (CBSS).
CBSS now includes a host of industrial sponsors and collaborators7 and involves faculty members across medicine, engineering, and science from both institutions. The goal is to couple university-led research directly with key component suppliers, system suppliers, and independent clinical laboratories, and innovate new products and services directly for the market. All indications are that this partnership of industry, government, and universities is successfully exposing faculty to new and important research opportunities and leading to results that would not happen otherwise. Federally sponsored translational research programs make a difference.
Even so, my personal experience suggests that these federal programs don’t, by themselves, create the kind of excitement and energy around goal-driven research that occurs when there is meaningful involvement directly with industry through direct support. Over the years, I have been involved with very productive collaborations supported both by direct sponsorship by a single company and by a consortium of companies, composed of would-be competitors who agreed to share in the funding of pre-competitive, basic research, that was equally valuable to all. Besides my research group having the ability to make progress on important problems, the keys to success of these programs were an open and transparent dialogue about the goals of the program, close collaboration with the sponsor who, in both cases, brought enormous empirical understanding to the program, and operating the program within the academic norms of the institution so that great graduate students could benefit from being associated with the projects. The close collaboration between the university research group and industry is the most difficult in a world of trade secrets and proprietary research.
I have also overseen large industry-sponsored programs involving multiple faculty members in larger areas of application. The keys to success of these programs are no different, although they are more difficult to manage with a large faculty involvement. Recently, the Tufts Center for the Study of Drug Development published a report that puts these corporate funding models, and others, in the context of biopharmaceutical research and development.8
Obviously, these models are predicated on an industrial partner with a commitment to research performed on the timeline of the university. Such partners are more and more rare, especially in the world of start-ups and venture capital. This leads the discussion to the interface between the university laboratory and the venture capitalist.
Smoothing the Interface for Translation to the Private Sector
Technology licensing offices at universities are moving from the model of simply helping faculty with disclosures and filing patents to a new model that emphasizes proactive help with establishing companies and attracting venture support. These changes are perhaps the most interesting and complex development under way within the research culture of our institutions.
As opposed to the old model of throwing the IP over the transom for industry to figure out how to value the technology, the new world of the academic entrepreneur requires many more steps, some that the university must be involved in to be successful. Consider these:
- The initial idea: disclosure and patent?
- Demonstrating product feasibility
- Creating a business plan and forming a company
- Identifying angel and venture capital funding
- Building a successful business
There are failures at each step and, in fact, most who begin the process of commercializing an invention are not successful; in fact the road map to success looks like an inverted pyramid (see Figure 4). Maybe this is why the path is so attractive to great researchers, who are so akin to failure as an everyday part of research.
Figure 4: The narrowing pipeline of entrepreneurs: from idea to successful enterprise
What is most important for today’s discussion is that the break-point between when the activities in this chain are inside and outside the university is not nearly as clear as in the linear technology transfer model. I believe that a modern Office of Technology Development should be involved with the faculty member through at least the first four stages of the process in order to help maximize the chance of success and to help the faculty member manage potential conflicts as they might arise.
Through our Office of Technology Development (OTD), Boston University has worked to put in place several pieces of this entrepreneurial ecosystem:
- Entrepreneur mentoring
- Ignition awards: demonstration of an idea
- Launch awards: aid in business creation
- Business incubation: help young businesses
- Support the search for outside venture capital
Let me speak briefly about each of these programs, which are described on the website of our Office of Technology Development: http://www.bu.edu/otd/.
We engage new entrepreneurs with seasoned mentors who can advise them on steps in value creation and business creation. Mentors are arranged by OTD with an attempt to start this process very early in the entrepreneurial cycle. This is a critical step, especially with faculty members who have no experience in the process of venture creation. Many ideas stop at this stage when a dose of experience-based reality is injected into the discussion. When the process goes forward, the mentor is an invaluable asset, particularly in the early stage of the process where there is little infrastructure to support the faculty entrepreneur.
Ignition Awards: Demonstration of an Idea
Ignition awards, funded by the University, are meant to bridge the gap between government-funded, discovery-oriented research and the follow-on development work performed by external commercial or non-profit entities. The purpose is to enable researchers to generate relevant data, reach key milestones, develop a prototype, or test an implementation strategy that will help bring raw technology and business concepts to a mature-enough state where they can be either licensed, form the basis of a new company, or create a new, non-profit social enterprise.
These awards are made on the recommendation of a group of experienced venture capitalists and are simply development awards within the University. Intellectual property created is still owned by the University and subject to our normal policies. The big leap to start a company need not occur at this stage.
Launch Awards: Aid in Business Creation
In what might be viewed as angel venture funding, the Launch Award program was put in place to support proactively the commercialization and dissemination of faculty-developed technologies by helping faculty start new companies based on technologies that they invented at the University. Typical Launch Awards range from $50,000 to $200,000. As investments into new companies, these awards are structured as equity and/or debt instruments.
Launch Awards are geared to help launch faculty start-up companies and to assist them to advance their development activities and raise their first round of outside private financing. Interestingly, the funding for these is budgeted within the University and is not viewed as part of the venture capital portfolio of our endowment. It would never make sense to view this way as a way of funding Boston University-generated start-ups; this is much too narrow a pool to justify endowment deployment, which is typically invested with large, nationally prominent funds.
Business incubation: help young businesses
Boston University operates a very successful business incubator, with turnkey infrastructure support and introduction to business services. The goal of the incubator is to facilitate the successful commercialization of new technologies through the creation and support of new companies. The program offers entrepreneurs the opportunity to leverage the business and technical resources of a major research university to accelerate product development, reduce risk, and add value to their companies.
The program also is designed to create opportunities for student internships, through our Institute for Technology Entrepreneurship & Commercialization (ITEC); having interns is a requirement of placement in the incubator. The accent is on new companies, as we also avoid long-term residents; housing in the incubator is limited to two years.
Support the search for outside venture capital
Finally, the highest hurdle for a new enterprise is to find the significant venture capital support necessary to launch the company toward its commercialization goals. We can’t guarantee this success, but we do have seasoned people in our OTD trying to help our faculty succeed at this step. The fact that the University has offered the levels of support that I have described above and, in some cases, is an angel investor, does help in the search for funding.
The pieces we have put in place also work well with foundations that are supporting translational research. An example is the Coulter Program for Translational Research Awards, supported by the Wallace H. Coulter Foundation, which is focused on biomedical engineering applications, and which uses much of the infrastructure I have described above. The Coulter program also employs a faculty member who is dedicated to helping identify leads for new technologies among the research on our campus and to helping faculty move the technology through the pipeline.
Our research universities are a jewel in the innovation ecosystem and will continue to play a leading role in the economic future of the country. Creations of the Cold War, we have evolved and adapted to continue our missions of undergraduate and graduate education and research. Our faculty members work at the leading edge of their disciplines and compete for research funding within our very competitive peer-reviewed system. They are working on important problems and respond well to the opportunity to collaborate with industry to focus on translational research, especially when sustainable research support is available. The models for funding by government and from private industry give excellent ways to motivate faculty to work on translational research.
For the most part, faculty members are not sensitive to the shift in the model for technology transfer from the classical linear model to the much more integrated model focused on faster commercialization. Motivating the principal investigators to focus on commercializing their ideas and inventions is a matter of lowering the hurdles, whether they are the access to research funding, the ease of technology transfer, or help with starting a company, and creating a culture within the university that rewards success for technology translation.
Universities are changing. We are bringing down the firewall between university research and development by embracing the process for translation through new venture formation. For the first time, universities are working to help faculty entrepreneurs interested in bringing their inventions to market. Research universities are an important part of the future of biological and more broadly defined, technological innovation. It is an exciting future.
- Stokes, D.E., Pasteur’s Quadrant: Basic Science and Technological Innovation, Brookings Institution Press, Washington, D.C., 1997.
- Bush, V., Science—The Endless Frontier: A Report to the President on a Program for Postwar Scientific Research, National Science Foundation, Washington, D.C., 1945, reprinted in 1990.
- Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, National Academies Press, Washington, D.C., 2007.
- Rising Above the Gathering Storm Revisited, National Academies Press, Washington, D.C., 2010.
- Cole, J.R., The Great American Research University, BBS Publications, New York, 2010.
- Gower, A.C., Spira, A., and Lenburg, M.E., “Discovering biological connections between experimental conditions based on common patterns of differential gene expression.” Open Access article http://www.biomedcentral.com/1471-2105/12/381.
- Including Applied Precision (a GE Healthcare Company), Agilent Technologies, THORLABS, BD, Lawrence Livermore National Laboratory, MIT Lincoln Laboratory, and Fraunhofer IPT.
- Milne, C.-P. and Malins, A., “Academic-industry partnerships for biopharmaceutical research and development: advancing medical science in the U.S.,” Tufts University School of Medicine, Boston, 2012.