The Value of University–Industry Partnerships
The National Academies University–Industry Demonstration Partnership, Washington, DC, USA
Leaders in the public and private sectors have long recognized that strategic university–industry (U-I) research collaborations are critical to advancing a nation’s commercialization portfolio and its overall economic competitiveness and well-being. According to a 2012 report from Battelle and R&D Magazine, U.S. corporate investments in research exceed all other sectors, with industrial funds for research and development (R&D) estimated to be $262 billion in 2013, an increase of 2.3% over their 2012 estimate [1]. The majority of these funds is directed toward applied R&D and constitutes approximately 62% of all U.S. R&D funding. Industry’s R&D investments for academic R&D declined steeply after the 1990s (above 7% in 1999 down to about 5% by 2004), but has seen a 5-year increase to approximately 6% in 2009 [2]. Recent trends, especially pronounced in the life sciences, indicate a changing approach to commercialization activities where large innovation firms are looking to make more efficient use of R&D investments by changing their R&D model; these changes include reducing overall R&D spending, outsourcing basic research (discovery) to universities and other research organizations such as nonprofit institutions and small businesses, and focusing by limiting the number of research collaborators to a smaller set of strategic partners [3].
While few challenge this hypothesis that the idea-to-innovation process is bolstered by healthy U-I relations, the type of strategic and high value U-I collaborations are difficult to implement and are negatively impacted by issues related to grant and contract conditions (both financial and nonfinancial), the treatment of intellectual property (IP), and compliance issues such as export control and conflict of interest [4].
Guiding Principles for University–Industry Collaborations
A 2006 publication developed by leaders of the nascent University-Industry Demonstration Partnership (UIDP) movement outlined a series of Guiding Principles to support healthy and sustainable U-I partnerships [5].
Guiding Principle # 1: A successful U-I collaboration should support the mission of each partner. Any effort in conflict with the mission of either partner will ultimately fail.
This seems obvious, but this concept is sometimes forgotten when universities and companies seek to collaborate on a project. While a conflict in mission can exist for a single project, this situation is not viable for sustainable, long-term collaborations.
Guiding Principle # 2: Institutional practices and national resources should focus on fostering appropriate long-term partnerships between universities and industry.
To maximize the benefits to each party and reduce the amount of time devoted to non-value-added activities, more companies are identifying a smaller set of institutions to develop deeper and more rewarding collaborations. Alternatively, this means that more institutions will be seeking to become a company’s “strategic partner” and gain access to more resources and benefits; many institutions will not be anointed as a core corporate partner.
Guiding Principle #3: Universities and industry should focus on the benefits to each party that will result from collaborations by streamlining negotiations to ensure timely conduct of the research and the development of the research findings.
The time and energy devoted to sponsored research agreement negotiations can lead to significant frustrations for researchers and administrators alike. Companies and universities have different perspectives on the desired outcomes from a research project as well as differing missions, and these factors can lead to protracted negotiations. For example, Dow Chemical has released data that show that the negotiation of specific contract terms was the most time-intensive aspect of coming to agreement. In their review of Dow agreements, it took over 5 months, on average, to reach a formal agreement (Figure 7.1).
The Johnson Continuum
While at Hewlett-Packard (HP), Wayne Johnson introduced the Johnson Continuum [6] that describes the myriad of ways in which HP engaged universities (Figure 7.2).
This continuum, while developed for one company, has broad applicability to others and can be used by other companies to advance their respective missions. Frequently, universities seek to quickly form a “strategic collaboration” with a company in the hopes of earning significant external funding from the industry partner. Several well-publicized examples have resulted in multimillion dollar arrangements; these high investment relationships are appealing to universities but are typically the result of foundational work that has taken place over a number of years and at much more modest levels of support where the academic institution has demonstrated its capabilities to meet or exceed a company’s expectations and provide tangible benefit to the corporate partner.
Role of Cocreation: Companies, Government, and Universities
Recognizing the value and potential impact of strategic U-I research engagement, governments—both at the state and federal levels—have been increasing their support for these partnerships. Some states (such as California and Maryland) have had long-standing programs to promote these collaborations with the idea that this investment of resources can bolster job creation through company relocation, retention, or expansion.
Maryland Industrial Partnerships (MIPS) Program
Maryland Industrial Partnerships (MIPS) promotes the development and commercialization of products and processes through U-I research partnerships [7]. MIPS provides matching funds to help Maryland companies pay for the university research. Projects are initiated by the companies to meet their own research and development goals.
Through MIPS, Maryland firms have the opportunity to leverage their research and development funds and gain access to the creative talents and extensive research base of the University System of Maryland. MIPS matching funds are awarded on a competitive basis for projects based on proposals submitted jointly by Maryland companies and researchers from any of the 13 University System institutions.
The maximum MIPS award for any single project is $100,000 per year for large and small companies and $90,000 for start-up firms. According to the program’s website,
With more than 400 Maryland companies participating in project awards since 1987, worth over $180 million-MIPS projects create results. MIPS-supported products have generated more than $25.2 billion in sales, added jobs to the region, and infused state-of-the-art technology into the global marketplace.*
Funding for Collaborations with Academia
Unlike other countries, the United States doesn’t have a formal industrial policy. Direct, financial support for collaborations between academia and large companies is typically limited to funding the university side of the collaboration. Among the existing programs supporting these collaborations are
- Department of Commerce i6 Challenge
- National Institutes of Health Clinical and Translational Science Award (CTSA) program
- National Science Foundation’s Grant Opportunities for Academic Liaison with Industry, Innovation Corps (I-Corps), and Partnership for Innovation (PFI)
- Small business–academic interactions greatly benefit from the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs, which directly fund research projects from designated small firms and universities.
A 2013 study [8] has examined how companies benefit from these interactions, and found that small- and medium-sized firms receive direct R&D value from these partnerships and that larger firms are more likely to receive indirect benefits (rent spillovers).
New Initiatives to Transform University–Industry Collaborations
Intellectual property (IP) rights continue to be the major stumbling block, although only a small percentage of research projects produce any IP that generates revenue.
Kauffman Foundation Free Agent Model
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