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The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus new local venture work regional nacie ways science student property support practices U.S. Department of Commerce interest students working talent governments industries policies October 2013 member universities industry intellectual leaders growth expand innovation programs create funding community transfer develop advisory commercialization campus education actively national commerce encourage efforts university call agencies faculty institution research assist accelerators enhance resources potential opportunities recommendations entrepreneurship partners promote association activities advance prepared by: engagement technology attract economic Office of Innovation & Entrepreneurship locke existing entrepreneurs program Economic Development Administration colleges collaborations higher In consultation with: many collaboration encouraging federal National Advisory Council on Innovation and Entrepreneurship strategies development conducted companies council conducted businessThe Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Introduction “The key to our success…will be to compete by developing new products, by generating new industries, by maintaining our role as the world’s engine of scientific discovery and technological innovation. It’s 4 absolutely essential to our future.” − President Barack Obama, November 17, 2010 America’s innovative and entrepreneurial culture is often regarded as one of this country’s greatest national advantages in an increasingly competitive world. This innovation infrastructure includes a large number of universities and colleges, research institutions, laboratories, and startup companies all across the United States - from major cities to rural areas. Every day, these institutions, often in partnership with federal agencies, develop breakthrough technologies in the life sciences, energy, telecommunications, information technology, education, social innovation, and other areas. This, in turn, has attracted many of the world’s best and brightest people to pursue careers in R&D and innovation in the United States. Many of these same minds become leaders and entrepreneurs across the nation – creating cutting-edge innovation products and services and building our great companies. 5 As other nations increasingly compete with the United States for leadership in innovation, America’s colleges and universities are doing their part to maintain our leadership and to nurture more innovation, create processes and programs to commercialize that innovation, and promote entrepreneurship as a viable career path for students. Universities use different approaches to encourage innovative thinking. Their approaches depend on their local environment and objectives, which in turn varies on geography, institutional size, history, culture, and funding resources. This diversity of approaches is proving to be both appropriate and successful for universities and colleges as they seek to create academic and economic benefits through innovation and entrepreneurship. Across the United States, state and local governments, economic development agencies, non-profits, universities, and business groups are trying to develop innovation ecosystems that foster market- focused innovation and nurture startup companies to drive job creation. They all share some common goals - to find ways to create millions of new jobs in emerging industries where the United States can maintain its economic leadership, gain market share or create entirely new industries. At the same time, the challenges of globalization require that America remain nimble and constantly deliver new, innovative products and services. Research has shown that business startups and surviving young firms disproportionately create jobs relative to their size in the U.S. economy. For example, while firm startups only account for roughly three percent of total U.S. employment in any given year, they are responsible 6 for about 20 percent of gross job creation. For the United States to remain economically competitive there is need for a strong national infrastructure to commercialize innovation and support high-growth entrepreneurship. If the nation needs to create millions of jobs, and many jobs are created by startup companies, then America will need to significantly increase the number of high-quality, startup companies in the coming years. In the United States, universities are a significant source of the ideas and R&D that are the value proposition of these high-growth startups. But those startups cannot be based solely in the traditional centers of American innovation, such as Silicon Valley, Boston, New York, and North Carolina. In order to develop local entrepreneurial ecosystems, these startups must also be based in new cities and rural communities in order to build their long-term economic prospects. Unfortunately, the rate of startup formation has slowed over the past several years. According to a report from the McKinsey Global Institute (MGI), the United States could have created almost two million more jobs in 2010 if new business creation and employment at new businesses had remained at the same pace as in 2007. Furthermore, the report stresses that returning to historic rates of startup formation will 4 See http://www.whitehouse.gov/the-press-office/2011/02/03/remarks-president-innovation-penn-state-university . 5 U.S. Department of Commerce, “The Competitiveness and Innovative Capacity of the United States,” January 2012. See http://www.commerce.gov/sites/default/files/documents/2012/january/competes_010511_0.pdf. 6 Haltiwanger, John C., Ron S. Jarmin, and Javier Miranda, “Who Creates Jobs? Small vs. Large vs. Young,” NBER Working Paper No. 16300, August 2010. See http://www.nber.org/papers/w16300.pdf?new_window=1. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 14The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus 7 be key to achieving high future growth rates in employment. Another MGI report also highlighted the importance of startup companies to economic growth, finding that around one third of the change in 8 economic growth can be explained by changes in startup rates. In other words, when economic growth increases, about one third of that growth can be attributed to increases in startup rates. These statistics, 9 when factored in with research findings based on Census data, validate the critical and growing role of the startup company in job creation and economic growth. Fortunately, in many industries a combination of innovation and development of new business models has drastically reduced the cost of starting and building a company. Startups can launch and grow quickly without necessarily depending on large quantities of elusive venture capital. This change has been well documented and is facilitated by the emergence of cloud computing; the ability to find contract partners to manage administrative services, such as payroll, human resources, and accounting; the growth of micro-targeted “apps” for a wide variety of needs; the ability to use social media for targeted marketing; and access to inexpensive credit. Finally, the rise of “Do-It-Yourself” prototyping companies and affordable 3-D printers has led to a flourishing community of startup manufacturers that can leverage these tools to create and market products in a customized, but scalable, manner. These low-cost opportunities are being embraced effusively by college students as they “bootstrap” their businesses while remaining students. Scattered throughout this report are examples of colleges and universities that are nurturing innovation and entrepreneurship in unique ways - from creating educational value and outlets for their students to providing new economic opportunities for their local economies. We know of at least 450 colleges and universities across the United States now have entrepreneurship programs. Although universities are starting at different places, their ability to mobilize their communities to become entrepreneurial is vital in creating a legion of high-growth startups. By engaging a broad yet diverse swath of the university community (students, faculty, alumni, local business and civic leaders) in entrepreneurship activities, universities and colleges aim to catalyze more solutions to major societal and economic problems–from inside and outside the lab–and to create an infrastructure supporting startup creation. Research universities in particular, are creating a culture of student and faculty entrepreneurship and seeking greater industry collaboration and commercialization of new technologies from their R&D efforts. As the Office of Innovation and Entrepreneurship (OIE) at the U.S. Department of Commerce’s Economic Development Administration talked to university leaders across the United States, they spoke about their growing roles in driving regional economic development. Universities are expanding beyond being primarily providers of innovation for their communities to also being a partner in vibrant local and regional ecosystems that include other universities, federal labs, startup companies, accelerators, and state and local organizations and improving access to public infrastructure. Many universities and colleges regard the model developed by the Massachusetts Institute of Technology (MIT) as a means 10 of benchmarking their own roles in their communities. MIT measures the economic value created by companies started by or affiliated with their alumni. In addition to creating tremendous economic value around the world, MIT found that nearly one-third of their entrepreneurs were not engineers, but from other disciplines, reflecting the broad-based nature of high growth innovation. A McKinsey Global Institute (MGI) report on entrepreneurship indicated that there are three pillars to the platform that enables innovation and entrepreneurship to flourish, and universities are increasingly driving or involved in each of these factors: developing fertile innovation ecosystems, creating an entrepreneurial 7 Manyika, James, Susan Lund, Byron Auguste, Lenny Mendonca, Tim Welsh and Sreenivas Ramaswamy, “An Economy that Works: Job Creation and America’s Future,” McKinsey Global Institute, June 2011. See http://www.mckinsey.com/insights/mgi/research/labor_markets/an_economy_ that_works_for_us_job_creation. 8 st McKinsey & Company, “The Power of Many: Realizing the Socioeconomic Potential of Entrepreneurs in the 21 Century Economy,” G20 Young Entrepreneur Summit, October 2011. See http://www.mckinsey.com/locations/paris/home/The Power of Many- McKinsey Report- 20111005.pdf. 9 U.S. Census Bureau, Business Dynamic Statistics (BDS). See http://www.census.gov/ces/dataproducts/bds/. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 15The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus 11 culture, and providing sustained financing for new ventures. Foremost, creating an innovation ecosystem is critical for the long-term success and quality of entrepreneurial activity. It is important to have a strong local base for entrepreneurship that is supported by regional economic development plans. American colleges and universities often are the centerpiece of regional economic development strategies because they are often the main the source of innovation, but also train the local talent base and workforce, and can connect various actors to drive a common agenda. Secondly, they often push for cultural change on their campuses and within their communities, which sustains the innovation ecosystem. This includes everything from targeted entrepreneurship education to greater ties with local industry, such as licensing technologies locally. The third factor suggested by the McKinsey report is the importance of available financing, in particular, early-stage and sustained financing. While colleges and universities traditionally have not provided financing for company startups, they have begun creating their own investment funds to support their home-grown entrepreneurs. Sometimes these funds are created through university endowments, specialized donations, or sponsorships. In addition, many university leaders have called upon the federal government to create funding and other assistance programs to fund the “valley of death” that innovative technologies face before their business model is clear. This has become very important to the major public research universities – many of whom are not based in major urban areas. According to data from the National Venture Capital Association, in the first half of 2012, almost three-quarters of venture capital investments in the United States were concentrated in three states – California, Massachusetts, and New York, and accounted for about 60 percent of all venture-backed deals. In the same time period, half of the states had only five or fewer venture-backed deals. This has led universities to step in and fill the void themselves and ask for federal support. A recent report by the National Research Council, “Rising to the Challenge: U.S. Innovation Policy for the Global Economy,” highlights the importance of university linkages to the market to better promote university-based 12 innovation and entrepreneurship. The report reflects, and encourages the idea of universities developing their own entrepreneurial infrastructure through four support strategies: The creation of matching funds to a fund that is set aside by universities to nurture innovation and entrepreneurship; The creation and support of accelerators on campus or affiliated with universities to help spinoffs grow without losing their connection to local innovation; The creation of funding mechanisms to help with commercialization and overcoming the “Valley of Death;” and Helping universities and colleges learn from each other and stay aware of best practices, emerging trends and new ideas. OIE began a series of discussions with the leadership of major research universities, regional state universities, community colleges, Historically Black Colleges and Universities (HBCU), and federal research labs to understand the diversity of approaches to innovation, commercialization, and entrepreneurship that they have undertaken. Initially, this outreach was conducted as follow up to a letter addressed to the U.S. Secretary of Commerce that was submitted by 141 university presidents, chancellors, and higher education association leaders through the National Advisory Council on Innovation and Entrepreneurship (NACIE). This letter identified five areas where universities were supporting innovation and entrepreneurship. Those categories included: Promoting student innovation and entrepreneurship, Encouraging faculty innovation and entrepreneurship, Actively supporting university technology transfer, Facilitating university-industry collaboration, and Engaging in regional and local economic development efforts. 10 Roberts, Edward B. and Charles Eesley, “Entrepreneurial Impact: The Role of MIT,” MIT Sloan School of Management, February 2009. See http://entrepreneurship.mit.edu/sites/default/files/files/Entrepreneurial_Impact_The_Role_of_MIT.pdf. 11 McKinsey & Company, “The Power of Many: Realizing the Socioeconomic Potential of Entrepreneurs in the 21st Century Economy,” G20 Young Entrepreneur Summit, October 2011. See http://www.mckinsey.com/locations/paris/home/The Power of Many- McKinsey Report- 20111005.pdf. 12 National Research Council, “Rising to the Challenge: U.S. Innovation Policy for the Global Economy,” The National Academies Press, Washington, DC. 2012. See www.nap.edu. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 16The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus These five categories reflect the widespread importance of innovation and entrepreneurship to the mission and activities of higher education. OIE found that universities do not view innovation and entrepreneurship as a short-term revenue opportunity, but as a long-term investment in their students, faculty, alumni, supporters, and communities. Student entrepreneurship serves as a critical gateway for universities to comprehensively embrace innovation and entrepreneurship. While many universities may hope that their students are secretly working on the next Apple® or Google®, their main objective is to provide educational value in a way that will focus students’ energies to help them identify and embrace their areas of interest, and supplement their classroom education with the development of life skills, such as budgeting, marketing, and professionalism. Many universities believe that they will benefit more through sustained relationships with their graduates, rather than by acquiring financial equity from student startups. Faculty entrepreneurship policies are designed to connect research to market and societal relevance and to find solutions to real-world problems. Universities are encouraging faculty entrepreneurship by creating flexible work place policies, financial awards, and making seed funding available to faculty, researchers, and graduate students, as tools for retention, revenue, income supplementation, and as a way to keep faculty motivated and engaged. It is also a reflection of a larger desire among a new generation of faculty to be more relevant to the world around them. The traditional home for starting the commercialization of university-based innovation and entrepreneurship is the university’s technology transfer office (TTO). In recent years, and despite criticism, the TTO continues to be the hub and engine of the commercialization process on campuses. TTOs are however taking on a greater role than merely assisting with patenting and introducing faculty and students to investors. TTOs are organizing networks across the universities’ communities, growing their teams in order to better understand new technologies, and organizing programming across campus departments. TTOs also are aligning their goals with university advancement, and are developing shared strategies around fundraising, alumni engagement and corporate relations. The need to collaborate with industry has grown in importance as access to federal funding declines. Not only are universities licensing inventions to, and collaborating with, established companies, but they are also increasing their support for home-grown startup companies. They continue, though, to recognize that larger, established companies remain an important source of revenue. Universities remain keenly aware of the importance of the private sector to their mission, because private industry will ultimately house both their innovations and students when they leave the university. In addition to licensing innovation and hiring their students, private industry is actually a producer of innovation itself, and has a much deeper understanding of the broader business climate and models to commercialize any given invention. Finally, universities are looking at innovation, commercialization, and entrepreneurship as part of their role in the economic development of their local economies – at the local and state levels. While universities have always had an important role in their communities, the points of engagement are rapidly changing. Instead of focusing solely on the economic impact of their graduate hires or of the physical expansion of university facilities, universities are establishing programs to engage their globally competitive talent to develop local and regional economies— the engine of job creation and economic growth in the United States. The NACIE-sponsored university presidents’ letter was just one of several efforts by higher education 13 institutions focused on innovation and entrepreneurship. As part of the Startup America Initiative, the National Association of Community College Entrepreneurship (NACCE) also enlisted 170 community college presidents to commit to entrepreneurship programs on their campuses. The HBCU community, through the work of the United Negro College Fund and the HBCU Business School Deans, is reaching out to its schools to help launch entrepreneurship and social entrepreneurship programs. Regional state colleges also began entrepreneurship programs as a means of keeping their graduates in their local areas. These efforts have many of the same characteristics as those of the NACIE-letter signatories, with a focus on idea generation, business model and leadership development, and local and regional development. This report seeks to highlight this alignment and assist colleges and universities that are striving to expand innovation and entrepreneurship opportunities. 13 See http://www.whitehouse.gov/startup-america-fact-sheet. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 17The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus The NACIE-sponsored university presidents’ letter identified multiple areas where the federal government could engage the university community. First, it became clear in conversations with university and business leaders that federal agencies will need to adapt to emerging technologies and ideas in two very important ways. Today’s innovation is multi-disciplinary in nature – across geographies, specialties, and fields. Wireless health is an example of a complex technology that merges the functionality of wireless technology, information technology, medical devices, and biotechnology – areas that are not currently within the purview of a single federal agency. The development of such a multi-disciplinary technology changes the relationships between federal agencies and their interactions with the university and business communities. The Economic Development Administration’s (EDA) i6 Challenge and Jobs and Innovation Accelerator Challenges, , 14 15 16 and the National Science Foundation’s I-Corps, are attempts to address this emerging issue, with multiple agencies pooling their funding for targeted support in multi-disciplinary areas such as advanced manufacturing or proof of concept development. Second, those organizations that seek to better support high-growth innovation and entrepreneurship, from government agencies to non-profits and accelerators, must be able to understand the needs of high-growth startups and their emerging technologies. Universities are recruiting outside partners to better train their students and faculty on the strategic needs of innovation-driven, high growth companies. University and business leaders see these areas of integration as critical to the success of those startups, and in helping the United States in areas of strategic national importance, such as manufacturing, exports, and investment. The “Innovative and Entrepreneurial University” is a combination of the most innovative, interesting, and successful examples of what universities and colleges are doing around the country to foster innovation and entrepreneurship. This report will leave the reader optimistic about America’s leadership in innovation and the ability of our entrepreneurs to grow our economy and create high-quality jobs. America’s universities and colleges are indeed on the move. Whether just getting started with entrepreneurship clubs or raising multi-million dollar gifts to scale up their commercialization efforts, the nation’s colleges and universities have elevated the topics of innovation and entrepreneurship to national prominence. The hope is that this report will spark the generation of even more ideas and discussions in higher education that will continue to move these topics forward. 14 See http://www.eda.gov/challenges/i6/. 15 See http://www.eda.gov/challenges/jobsaccelerator/. 16 See http://www.nsf.gov/news/special_reports/i-corps/. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 18The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus I. Promoting Student Innovation and Entrepreneurship The main priority of any university and college system is education. Many universities are expanding their educational curricula and programs to foster innovation and entrepreneurship. Universities increasingly offer courses and programs in entrepreneurship and related fields for undergraduate, graduate, and postdoctoral students. Students develop a better understanding of innovation and entrepreneurship, through newly-established curricula, minors, majors, and certificate programs that cut across educational disciplines, and through educational programs that emphasize hands-on learning. Many universities are also augmenting traditional classroom instruction in novel ways. Universities are increasing educational opportunities outside of the classroom to include student housing and dormitories that directly foster the entrepreneurial spirit. Student clubs, centered on multi-dimensional entrepreneurship activities, also are on the rise. Most campuses run a variety of business plan and venture competitions that offer students support networks, such as mentors and training opportunities, to help them further develop their innovative ideas. Courses and degree programs in innovation and entrepreneurship Many universities are seeing an increase in student demand for innovation and entrepreneurship, broadening course and program offerings. Entrepreneurship courses and programs equip students with a wide range of valuable skills, including business-plan development, marketing, networking, creating “elevator pitches,” attracting financing (such as seed capital), and connecting with local business leaders. Some universities are offering bachelor and master’s degree programs and concentrations in innovation and entrepreneurship, expanding upon traditional Bachelor of Arts (B.A.) and Bachelor of Science (B.S.) degrees (Box 1.1). Many business schools are breaking down traditional barriers and encouraging entrepreneurship through multi-disciplinary courses and programs to students of all academic disciplines. Box 1.1 The University of Colorado’s Innovation and Entrepreneur Degree Program Located at the Colorado Springs campus, this program offers a Bachelor’s degree in Innovation (B.I.), which provides a unique multi-disciplinary team approach. For example, in addition to completing classes in computer science, a B.I. in Computer Science requires students to develop strong team skills, study innovation, engage in entrepreneurship, practice proposal writing, and learn business and intellectual property law. Accreditation remains an important issue to the academic community. While many schools now offer entrepreneurship courses, many commented about the inability to develop certificates, programs, and degrees without proper guidance and standards for entrepreneurship education. Many anticipate that in the coming years the leading accreditation agencies, along with state education agencies, and the U.S. Departments of Labor and Education, will come together to address this issue, and that this will eventually lead to a great expansion of formal programs in this space. Experiential learning Experiential or applied learning has been increasing in popularity at universities and colleges for many years now. This type of education improves upon traditional classroom instruction—which consists mainly of lectures and fact-based memorization—by actively engaging students in innovative and entrepreneurial activities through workshops, conferences, internships, hands-on experience, and real- world projects (Box 1.2). Experiential learning in innovation and entrepreneurship has spread outside of business schools and moved into the fine arts, science, and engineering programs. Universities and colleges also support specialized internship programs focused on entrepreneurship education and technology innovation that match students directly to start-up projects, technology transfer offices, venture capital firms, and industry. This variety of educational opportunities allows students to address real-world challenges in a supportive educational environment. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 19The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 1.2 Examples of Experiential Learning Opportunities University of Illinois’ Patent Clinic provides law students the opportunity to draft patent applications for student inventors. Student-innovators with potentially patentable inventions are referred to the Patent Clinic by the Technology Entrepreneur Center (TEC) at the College of Engineering. The Patent Clinic then reviews the innovations, searches for relevant prior art, and selects one innovation for each law student. Each law student then proceeds to work with the inventors to draft a patent application on their innovation in consultation with an instructor. The University of Wisconsin-Madison’s “Entrepreneurial Deli” borrows a food court metaphor to help students meet and learn from experienced young entrepreneurs. Using the tag line “Grab ‘n Go Entrepreneurship” and a speed-dating-like format, the workshops encourage students to learn first-hand about solutions to different problems that confront startup ventures from experienced entrepreneurs. Washington University in St. Louis’ student internship program offers 25 paid internships per summer for students to work in a start-up company four days a week and attend experience learning workshops one day a week. The University of California at San Diego’s Rady School of Business requires its management students to take a course entitled “lab to market.” In Lab to Market, MBAs create new products or services and go through the commercialization process, with advice from faculty and business mentors. Competitive opportunities Competitions are an excellent way to actively engage faculty and students in the learning process. As a whole, business plan competitions are geared toward teaching students how to think outside the classroom, fostering collaborations across disciplines and increasing access to businesses. Competitions provide an exciting platform for students to learn practical skills, such as how to craft a business plan, access venture funding, and pitch ideas. Sequential competitions build upon project ideas, ultimately leading to completed business plans that are ready for possible funding from investors. Universities understand this, and are transitioning away from single monetary rewards for competitions and are increasingly recognizing milestone achievements with a multitude of prizes, including non-monetary resources such as incubator space and mentorships (Box 1.3). Some universities are expanding their student team competitions to include faculty and alumni, and increasing the scope and size of the pool of resources through collaboration with industry and local partners. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 20The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 1.3 Examples of Business Plan Competitions Rice University makes over 1.2 million available in cash, prizes, and in-kind resources to winners to provide seed funding to launch companies. These funds serve as seed funding for many of the winning teams. Florida Atlantic University (FAU) provides the winner of their business plan competition with free space in the incubator for half a year. Michigan Technology University’s business plan competition winners are rewarded with a monetary prize that goes directly to their business, instead of to the individual. The following year, the winners will highlight their business milestones that have resulted from the funding. University of Washington has a stage-gated business plan competition comprised of different competitions throughout the school year in combination with seminars, courses, and mentorship to assist in advancing student ideas to the next level. The competitions range across disciplines and industries, bringing students together from different departments. University of Oregon’s Venture Launch Pathway program, student teams pick from technologies from many sources included federal labs, companies, universities and technologies from other countries. The technologies that look most promising are advanced by student teams, with backgrounds in law, business, and sciences, into the international business competition circuit. The University of Wisconsin has a 100 hour challenge in which students must purchase a product, change it, and create a public URL for outreach. They are then tested on many different aspects of entrepreneurship. University of Louisiana—Lafayette hosts the Innov8 Lafayette program. This eight day, community-wide program includes specific activities centered on the importance of innovation. Some activities are focused on the environment, entrepreneurship, and the arts. When discussing the role of federal agencies in this space, many universities commented on two recent actions by the Obama Administration. First, on the possible expansion of an innovative program 17 launched by the U.S. Department of Energy in 2012. This National Business Plan contest provided seed funding and technical support to regional business plan contests at universities and in communities. The program connected the Department of Energy with a large group of leading entrepreneurs and innovators in the energy space for a relatively small amount of sponsorship. Many universities hoped that other agencies would also look at this model as a way to access market intelligence, cutting-edge technology solutions, and as a way to engage better with entrepreneurs and startups. In addition, many universities are hopeful that recent guidance provided by the U.S. Department of 18 Treasury about Program Related Investments (PRI), could greatly increase the amount of philanthropic investment in their student entrepreneurs. The guidance put forth by Treasury makes it easier for philanthropic entities, such as foundations and trusts, to directly invest in for-profit entities that share their mission. This will greatly expand access to philanthropic funds, in addition to traditional investor capital, to advance socially beneficial technologies in food, energy, and health. 17 U.S. Department of Energy, National Clean Energy Business Plan Competition. See http://techportal.eere.energy.gov/commercialization/ natlbizplan.html. 18 U.S. Department of the Treasury, proposed regulations for program-related investments by private foundations. See http://www.irs.gov/Charities-&-Non-Profits/Examples-of-Program-Related-Investments-by-Private-Foundations-%E2%80%93-Proposed- Regulations. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 21The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Entrepreneurial and innovation collaboration spaces Entrepreneurial and innovation “living spaces” are a unique trend in motivating student involvement outside the classroom setting. These spaces use the power of proximity to promote student engagement in developing innovative ideas and starting businesses (Box 1.4). Some universities are embracing the entrepreneurial dorm, whereas others are expanding this concept to promote entrepreneurial clusters, within the university and sometimes stretching into local communities. Entrepreneurial spaces facilitate student access to learning and networking opportunities with local entrepreneurs and innovators. These spaces also host a variety of student entrepreneur clubs that serve as a premier resource for aspiring student entrepreneurs and foster a community of like-minded peers. These clubs are geared toward building financial literacy and leadership skills, as well as encouraging students to pursue commercialization opportunities for innovative ideas and technologies. Box 1.4 Examples of Living and Learning Spaces University of Florida’s Inspiration Hall is a new, state-of-the-art live-and-learn community located within Innovation Square, only two blocks from the University of Florida and the Florida Innovation Hub. By living and learning within the Innovation Square environment, undergraduate students can interact throughout their academic program with other like- minded people: fellow students, researchers, faculty, business professionals and entrepreneurs. Purdue University has an Entrepreneurship and Innovation Learning Community (ELC) that is made up of students interested in new business ventures that live together in Harrison Hall, many of whom also participate in the entrepreneurship certificate program. Community college entrepreneurship As part of the Startup America Initiative, 170 community colleges across the United States have launched entrepreneurship programs. These programs are often taking the same shape as those at larger research universities. Institutions such as Lorain Community College OH offers incubators and shared facilities for their students and regional entrepreneurs while Middlesex Community College, MA, provides seed funding for their students to launch entrepreneurial ventures. Community colleges are embracing entrepreneurship for the same reasons as their colleagues in research universities. It reflects their student desires, the changing nature of their local economies, and a change in their role in workforce training with larger companies. Many of them have expressed the desire to see entrepreneurship become a career pathway for their students similar to other career fields. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 22The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus II. Encouraging Faculty Innovation and Entrepreneurship A new generation of faculty on America’s campuses is striving to conduct world-class research, while working to identify the relevance of their research for solving real-world problems. To address this issue, these institutions are fostering faculty entrepreneurship through educational opportunities, acknowledging technology development, increasing transfer and commercialization achievements, and facilitating collaborative efforts. This commitment to promoting innovation pushes faculty to identify and employ available networks and resources to pursue innovation and entrepreneurship opportunities. New faculty orientations, boot-camps, and seminar events focusing on innovation and entrepreneurship are examples of some of the educational opportunities offered to faculty. Campuses are actively connecting faculty to networks of recognized entrepreneurs and industry partners, to promote cross- disciplinary efforts. Faculty tenure considerations and other rewards are on the raise, incorporating faculty contributions in innovation and technology transfer efforts, while providing the incentives to engage in R&D, technology development, and business start-up efforts. The changing innovation culture On trend is a shift in the hiring and retention culture across many universities. Today, institutions hire faculty who are interested not only in the advancement of their academic areas but also in pursuing commercial applications for their technologies, or engage in entrepreneurial activities that correlate with their academic disciplines. New faculty orientations often include workshops and training to help faculty navigate technology transfer offices and find the resources available to them on campus. Universities also offer faculty training in areas such as professional mentoring, prototype development, business planning, and market testing (Box 2.1). An evolving university innovation culture provides faculty with the essential information and incentives to move from a narrowly-focused scientific research tradition to a more forward-looking, comprehensive innovative process that incorporates technology development and commercialization efforts. Box 2.1 The University of Pittsburgh Offers a Business of Innovation Commercialization Course The Office of Technology Management and the Office of the Provost hosts an annual, seven- week course aimed at educating and motivating both student and faculty researchers in innovation development, commercialization, and entrepreneurship. The course takes participants through each step of the innovation and commercialization process, from idea conception to intellectual property protection and licensing, and all the way to early-stage market research and networking strategies. Private, individualized workshops are also offered where students can explore their own innovation ideas in a team setting. Rewarding faculty innovation and entrepreneurship Universities and colleges are celebrating faculty achievements in innovation and entrepreneurship. These acknowledgments include campus-wide prizes and award ceremonies that bring the faculty community together to recognize and learn about the accomplishments of their peers across academic disciplines (Box 2.2). Awards such as “Innovator of the Year” and “Faculty Entrepreneur of the Year” are popular as they reward faculty for achievements that reach beyond traditional research and teaching accomplishments. Universities and colleges are updating tenure and sabbatical leave guidelines to encourage faculty to pursue collaborative and entrepreneurial endeavors, such as launching a start-up company (Box 2.3). Some programs allow faculty time off to engage in innovation and entrepreneurial activities, without incurring any penalty towards tenure and promotion. Providing leave to pursue entrepreneurial activities increases the potential for the successful technology development and commercialization of research, while adding to faculty’s understanding of the commercialization process, enabling them to incorporate new material into student instruction. This flexibility also improves the focus of R&D efforts and facilitates public engagement by encouraging faculty to commercialize their research. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 23The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 2.2 University of Southern California The university promotes faculty entrepreneurship and innovation by supporting, rewarding, and funding the work of faculty members. The Lloyd Greif Center for Entrepreneurial Studies presents three faculty members with research grants totaling 11,000 as part of annual Faculty Research Awards. The Center also rewards entrepreneurial-minded faculty with the annual Greif Research Impact Award, which is given to the faculty member who has written an article that has the most effect on the area of entrepreneurship. Box 2.3 University of Virginia In 2010, UVA’s School of Medicine was among the first to include innovation and entrepreneurship activities among its promotion and tenure criteria. Candidates for promotion and tenure are asked to provide a report on their inventions and the patent status of those inventions; registered copyright materials; license agreements involving their technologies; and any other contributions to technology transfer-related activities, including entrepreneurship and economic development impact. Finding the appropriate rewards and policies to promote faculty innovation is complex. Internal policies for faculty innovation performance usually are evaluated at the discretion of individual departments. For these programs to be successful in spurring innovation out of the higher educational system, universities and colleges need increased flexibility in developing faculty tenure, leave regulations, and other faculty- based policies that facilitate innovation and entrepreneurship. Supporting collaboration As faculty become more interested in commercialization activities, universities are providing additional resources to encourage collaboration with local communities and industries. A few universities have hired individuals, or created teams, to connect faculty with similar interests and research goals—often reaching across academic departments—to share information and experience on creating startups, licensing technology, and collaborating with industry. This cross-disciplinary effort helps share information on best practices and spurs new ideas for developing and commercializing new products. Universities and colleges are also inviting community leaders and local entrepreneurs to become more involved in the development of technology and startup companies (Box 2.4). A few universities have developed programs to link experienced entrepreneurs with faculty to assist in the startup process, development, and longevity. In most cases, faculty returns to teach and continue research, allowing the non-university collaborative partners to take over the leadership role and continue to develop and expand the companies. Entrepreneurs also serve in a mentoring role, helping faculty to identify and further develop commercialization opportunities. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 24The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 2.4 The University of Cincinnati Research Institute (UCRI) The University’s non-profit allows local, national, and international industries to partner with expert faculty and students performing sponsored research. These partnerships not only connect university experts with industry, but also facilitate the commercialization of research, and enhance cooperative and experiential learning experiences and opportunities. With the creation of the foundation outside the university, professors and other state employees remain in compliance with state restrictions on equity and revenues streams, while allowing them to be compensated for their work through income from licensing revenues and other shares. To capitalize on the expertise of seasoned entrepreneurs, many universities are building entrepreneur- in-residence (EIR) programs. The EIRs work with university researchers, students, faculty, and staff in the development of early stage start-up companies to provide guidance and advice. EIRs help interested faculty members better understand entrepreneurship, evaluate technology for licensing, expand their network of resources, and guide them on how to start the commercialization process (Box 2.5). EIRs usually have a focus area that meets faculty needs, often have a good working knowledge of current intellectual property laws and can assist faculty in finding those ideas in their research programs that are worth commercializing. The EIR program provides mentorship opportunities that help stimulate innovative and entrepreneurial activity throughout campus. Box 2.5 University of Nebraska Medical Center - Entrepreneur in Residence The EIR works with licensing staff and researchers at the University of Nebraska Medical Center to help identify, evaluate, develop, and support the creation of business plans and new companies based on technology developed at UNMC. The EIR is an industry expert with scientific, entrepreneurial, managerial, and financial experience who works side by side with UNMC scientists to identify, evaluate, and support the development of new start-up companies based on technology license agreements from UNeMed. Engaging with industry Faculty is increasing its engagement with industry to obtain research and technology development ideas, capital, and other types of support. Many universities host events to bring faculty, industry, angel investors, and venture capitalists together for networking opportunities (Box 2.6). These events give industry an early look at R&D activities on campus, while providing faculty with networking and funding possibilities. Examples of such events include lunch-and-learn series, rapid-fire networking programs, seminars, and workshops. Box 2.6 California Institute of Technology The university runs a comprehensive “tech review” process for faculty, in which Caltech researchers have the opportunity to give a short presentation on a new and promising technology for commercialization to an audience of angel investors, venture capitalists, and entrepreneurial alumni. A roundtable discussion then takes place where investors provide feedback and advice on commercial development potential of the technology. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 25The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus A common theme developing across campuses large and small is the importance of creating connections between faculty and the outside world. Programs, such as proof-of-concept, are meant to connect faculty research topics to market relevance, while externships and leave of absence policies are designed to provide faculty with the time they need to understand the latest trends and technologies in industry in their fields of science. Although the NACIE-led letter prioritized these sorts of programs, they have not grown as quickly as expected due to a combination of budgetary issues and faculty interests. As universities provide faculty with increased educational opportunities, celebrate their innovative achievements, and enable collaboration with experienced entrepreneurs and business communities, an entrepreneurial culture is developed throughout the educational system. Students also can benefit from the on-going education and experiences of faculty. Through dedicated institutional support, faculties across academic disciplines are able to work together with each other, community entrepreneurs, and businesses to develop new technology and create start-up companies. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 26The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus III. Actively Supporting Technology Transfer Effectively transforming research and ideas into marketable products and services is often a lengthy and complex process requiring substantial resources. The university and college systems are one of the most important sources of the nation’s R&D output. The goal of a Technology Transfer Office (TTO) at a college or university is to protect and promote the research developed by its faculty and students through commercialization and patents. Once the research is protected, the technology and information can be released, providing social and economic benefits. Reducing technology transfer barriers A high priority for the nation’s university and college system is to streamline the technology transfer process, to more effectively identify research with market potential, and to move it from the lab to the marketplace. Universities are broadening their technology transfer functions to meet the growing demand of their services while working to minimize the costs and risks of commercializing research. They are accomplishing this by expanding TTO facilities, hiring skilled staff, improving technical support to researchers, and increasing access to capital for researchers. The success of these heightened technology transfer efforts at universities is evident by an increase 19 in licensing and startup activity. According to a licensing survey by the Association of University Technology Managers (AUTM), the number of licenses executed in fiscal year (FY) 2011 rose 14 percent compared to FY 2010, and the number of startups formed was up three percent during the same time period. Reducing these barriers while also developing common standards is critical to the TTOs seeking to add societal benefit and impact to their missions. As entrepreneurs today move towards a greater focus on the triple bottom line (environmental, social, and economic or “planet, people, and profit”), TTOs are increasingly being asked about their processes for patenting low-cost and environmentally-friendly innovations as well as those innovations that investors may be interested in funding using microfinance models. Consequently, TTOs are developing processes for these sectors to integrate into the model of their traditional work. Expanding TTOs level of support TTOs are hiring more skilled professional staff with experience in areas such as intellectual property law, licensing, and in developing and managing university-industry partnerships. In addition, a university’s TTO often taps into institutional resources such as law and business graduate students and faculty. Examples of other skills sought by TTOs include marketing, accounting, and regulatory compliance (Box 3.1). Acquiring experienced staff and in-house assistance not only leverages internal resources but also reduces the costs and time associated with filing patent applications and negotiating technology licenses. TTOs are also integrating accomplished entrepreneurs to consult with students and faculty about building startup companies to foster their technologies. Box 3.1 Utah State University The university’s Intellectual Property (IP) Services unit within Commercial Enterprises helps USU faculty and staff manage and protect intellectual property. IP service managers work and assist USU and USURF researchers to identify, disclose, protect, and commercialize USU intellectual property. IP Services includes two IP attorneys, one registered patent agent, one paralegal and one docket manager. 19 Association of University Technology Managers, “AUTM U.S. Licensing Activity Survey: Highlights,”. See http://www.autm.net/AM/Template. cfm?Section=FY_2011_Licensing_Activity_Survey&Template=/CM/ContentDisplay.cfm&ContentID=8731 ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 27The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus An emerging trend in technology transfer is the establishment of “one-stop-shops” that provide assistance, mentorship, and information on patenting and licensing processes to faculty and student inventors. These “shops” streamline the technology disclosure process and integrate all technology transfer functions into one facility. Interested faculty and students can explore the start-up potential for their inventions and can obtain assistance during the technology development and marketing. TTOs are also expanding beyond their traditional areas of focus, namely the hard sciences and engineering. Today, many TTOs provide guidance in navigating licensing processes and commercialization opportunities for innovative work in areas such as education, criminology, organizational structure, music, dance, and the fine arts. NACIE’s letter to the Secretary of Commerce recommended the importance of building a common platform to connect similar efforts – so that institutions know what research, intellectual property development, and programming their peers are involved with. The fastest growing trend in this space is the rise of Proof of Concept Centers, such as the MIT Deshpande Center for Technological Innovation and the Von Liebig Center at the University of California San Diego. These centers have a variety of programs that collectively achieve three goals: increase the volume and diversity of entrepreneurship on campus, improve the quality of startups and entrepreneurs on campus, and be increasingly engaged with local investors and entrepreneurs so that the university’s startups stay local. Box 3.2 University of Toledo The “Lab-to-Launch” initiative partners UT’s technology transfer team with Rocket Ventures LLC, a pre-seed fund, to accelerate the transfer of research to the market. The team works closely with research faculty to identify and promote high-potential platform technologies and expedite the transfer of university research into commercial products and services, with particular emphasis on regional economic development. TTOs are also hiring undergraduate and graduate students both as interns and employees (Box 3.3). These students acquire experience working on commercialization projects and the associated challenges, such as the patenting and licensing process, and to how access funding. Some students sort through faculty R&D submissions and help identify university research with technical viability and commercial value. Other students, in particular law and business school students, help file patent applications, share information on intellectual property rights, consult on internal strategy, and provide business development coaching. A few TTOs offer lecture series to faculty and students on technology transfer topics to attract more interest and educate on commercial viability. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 28The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 3.3 Examples of Educational Hands on Learning and Workshops University of North Carolina Chapel Hill’s Office of Technology Development (OTD) internship program is an eight-month position for graduate students or post-doctoral fellows who wish to learn more about intellectual property protection and technology commercialization. The internship runs during the academic year and requires 8 to 12 hours a week, during which the interns participate in a formal training series covering the basics of technology transfer, market assessments, and direct marketing for select technologies. Interns also gain exposure to ongoing negotiations between the OTD and industry partners. University of Rochester’s F.I.R.E. Series is a regular lecture series designed to educate the university community about the many aspects of technology transfer, what it means to be an inventor, what every researcher should know in order to protect potential intellectual property rights, and the complexities of starting a business. This lecture series is run out of the University of Rochester Medical Center Office of Technology Transfer. Cornell University IP&Pizza™ and IP&Pasta™ host outreach activities to Cornell faculty, research staff, and students. The goal of these activities is to increase appreciation of the importance of making university research results useful to society, providing a basic knowledge and understanding of intellectual property issues, and creating an awareness of capturing and protecting valuable intellectual property and its importance to entice potential industry partners. This and other similar programs are run through Cornell’s Center for Technology and Enterprise and Commercialization. Protecting intellectual property Universities have created a variety of strategies to protect their intellectual property, which has raised the demand for intellectual property services and staff with knowledge of intellectual property laws and procedures. One reason for the increased demand is that many TTOs are now connecting with faculty early in the R&D process to encourage them to file patent applications prior to publicly releasing their results. One institution files a provisional patent application for every invention disclosure submitted by university researchers, while others are more selective and file a combination of provisional and utility (or regular) patent applications on technologies that appear to have the greatest licensing potential (Box 3.4). To provide faculty, students, and staff with incentives to protect intellectual property and pursue commercialization of research, universities are increasingly rewarding them by offering a greater share of licensing royalties and other commercialization income. Box 3.4 California Institute of Technology Caltech files a provisional patent application for every single invention disclosure that goes through their TTO. Over the first year following the filing of the provisional patent application, the TTO evaluates the technical and business merits of the invention to determine whether it is worth filing a regular patent application on the invention. Shrinking the funding gap Universities are working with their TTOs to provide and increase access to funding opportunities in order to help bridge the transition between research and technology development, commonly referred to as the “Valley of Death” (Box 3.5). Universities use a variety of funding mechanisms to bridge the Valley of Death. Many universities have created venture-, proof-of-concept-, and growth-funds to assist in the development of technology and startups resulting from university research. Additionally, universities have sought local community and alumni support to help TTOs meet the growing demand for venture funds and grants for seed funding. Convertible debt loans are used by some universities to ease commercialization, with faculty paying back a predetermined percent of start-up costs. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 29The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 3.5 Bridging the Funding Gap University of Wisconsin’s Wisconsin Alumni Research Foundation (WARF) is a nonprofit organization that started as a funding center from alumni contributions. Today, WARF raises funds through licensing university research and technologies to companies for commercialization. The funds generated are used to fund research, build facilities, purchase equipment, and support faculty and student fellowships. University of Oklahoma’s Growth Fund provides money to researchers on each OU campus to help them develop prototypes and conduct additional research to keep research programs viable through the Valley of Death. Temple University’s Office of Technology Development and Commercialization has provided more than 130 million in funding to support advanced research commercialization at the university. University of Colorado System’s TTO Proof of Concept (POC) programs are supported by income generated from the commercialization of CU intellectual property. The CU TTO has created, and supports, POC funding opportunities for university research and business development. To date, TTO’s POC programs have involved over 110 projects and more than 13 million in total funding. University of Michigan’s Gap Fund program was developed from the proceeds of the UM Tech Transfer central administration revenues, with matched funding from the State. University of Minnesota’s Internal Business Units (IBUs) program has developed an incubator space to help mature and launch early-stage technologies. IBUs address a small number of technologies that are nearly market ready but need some limited investment and early sales in order to be more attractive as startup opportunities. IBUs are an effective way to incubate those technologies in a business setting where they receive support from the university through seed funding and resources. IBUs are not a mechanism for bridging a broad “valley of death,” or incubating technologies that will require a long period of development or significant seed funding, but rather represent an innovative strategy for new company development. Emory University’s Drug Innovation at Emory (DRIVE) is a non-profit drug development company separate from, but wholly owned by, the university. DRIVE expands the capabilities of traditional academic drug discovery by combining the expertise of Emory scientists with industry drug development experts. University of Akron’s Akron Regional Change Angel (ARCHAngel) Network is a regional forum for introducing investors to market-driven, technology-based investment opportunities. It brings together promising technology companies and angel investors with a particular focus on businesses that leverage the region’s strengths in healthcare, information technologies, polymers, and other advanced materials. Regional technology transfer centers In various parts of the country, universities and non-profit research centers are already coming together to collaborate on the commercialization of research. According to a recent survey of its member’s by the Association of Public Land Grant Universities (APLU), a large percentage of major public universities do not have separate technology transfer offices. In addition, students and alumni from smaller colleges often don’t have an on-campus technology transfer office, and need support from others in their regions. Regional tech transfer centers are filling that role, by providing the technology transfer function across large universities, regional state universities, non-profit research organizations and small colleges across a region (Box 3.6). Universities such as the University of Utah and Texas System have taken the lead in developing these centers in order to collaborate better with their regional partners. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 30The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus Box 3.6 University of Texas South Texas Technology Management Center South Texas Technology Management (STTM) is a regional technology transfer office affiliated with the University of Texas Health Science Center at San Antonio (UTHSCSA), and has collaborated with the research departments of the University of Texas San Antonio (UTSA), the University of Texas Pan American (UTPA), Texas State University (TXState), the University of Texas at Brownsville (UTB) and Stephen F. Austin University (SFA). It provides a host of services for regional institutions such as support on grant applications, patenting, and commercialization. Through the collaborative efforts STTM has built a portfolio of technologies and projects to take to push ideas to the next level. The Horizon fund provides 10 million to spin off companies created using University of Texas technology. Several universities indicated that they experienced funding challenges in this area. In particular, there are very few sources of funding for innovation infrastructure – i.e., support for the organizations that bring together researchers, entrepreneurs, investors, and professional services to help deliver ideas to the marketplace. Often, private philanthropy and corporate sponsors are not interested in broad-based infrastructure support, but rather on programmatic funding for specific sectors. To help fill this void, the federal government has created grant challenge such as EDA’s i6 Challenge and NSF’s Innovation Corps, to provide flexible funding to support innovation infrastructure. Presidential Memorandum on Accelerating Technology Transfer and Commercialization of Federal Research In 2011, President Obama posted a Presidential Memorandum entitled “Accelerating Technology Transfer and Commercialization of Federal Research in Support of High-Growth Businesses.” This Memorandum requires federal agencies highly involved in R&D and entrepreneurship to develop plans to greatly increase the commercialization of federally-funded R&D over the next several years. There are several proposed programs to guide technology transfer efforts in the federal government, but many of the agency decisions will also have an impact on universities. The Interagency Working Group on Technology Transfer, managed by the National Institutes for Standards and Technology, has released its preliminary report on the implementation of the Presidential Memorandum. The various agency reports outline the unique programs and emerging best practices among federal agencies for partnering with outside R&D organizations such as universities and private industry, funding the commercialization of research, and assisting startup companies. In addition, federal agencies will put into place more robust metrics to measure the success of technology transfer and commercialization of federally-supported R&D. These metrics will help federal agencies identify the commercial impact of their in-house R&D, as well as that done with partners, such as universities. ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 31The Innovative and Entrepreneurial University: Higher Education, Innovation & Entrepreneurship in Focus IV. Facilitating University-Industry Collaboration University-industry partnerships are essential for further developing ideas and technologies derived from university research. These partnerships are crucial for directing investment toward commercially promising research, and helping to bridge funding gaps that often exist at the technology development and marketing stages. Universities and industry have found that working together is mutually beneficial because knowledge and resources are shared to achieve common goals. Industry benefits from greater and earlier access to scientific expertise, intellectual property, and commercial opportunities, while universities benefit from enhanced educational opportunities for faculty and students, revenues from successful licensing agreements and ventures, and local and regional development. Sharing resources and knowledge As federal resources become limited, universities are seeking broader channels of support for technology development and commercialization efforts, particularly from the business community. Several universities are creating “front-door policies” to easily engage private industry. Universities have a wealth of resources available to them, including human and intellectual capital, and R&D infrastructure. So the front-door policies, web-portals and easy to navigate licensing policies all expedite the ability of private industry and startups to identify university R&D with commercial potential earlier and open up opportunities for companies to easily commence strategic partnerships with universities. Companies of all ages, sizes, and geographic proximity are benefiting from this invigorated support from universities. And better use of the universities physical infrastructure, such as lab space utilization with industry, reduces risks and provides valuable research opportunities to their faculty and students. By collaborating with universities and colleges, companies are able to take advantage of their well-equipped labs and breadth of skills. Universities with specific strengths in the areas of manufacturing or energy research have established long-term partnerships with large corporations, such as BMW®, FedEx®, Johnson Controls®, IBM®, Cisco®, Proctor & Gamble®, and Minova® (Box 4.1). These relationships allow students and faculty to engage in cutting-edge research while helping solve industry problems. There is, however, some concern among a few universities that partnerships with large companies may limit a university’s research options to only those areas of interest to industry. Tulane University, as an example, works to establish partnerships with smaller local companies not only to support the university’s research but also to engage with the local community in a mutually beneficial way. Box 4.1 Clemson University’s International Center for Automotive Research (CU-ICAR) CU-ICAR is an advanced-technology research campus where university, industry, and government organizations collaborate. In the university’s labs and testing facilities, automotive, motorsports, aerospace, and mobility experts work together on R&D. The Center’s focus on applied education and direct engagement with industry leaders includes cutting-edge curriculum development and research capabilities focused on current trends and related issues in the automotive industry. Partners, such as BMW®, Michelin®, and Koyo® work, with students and faculty to focus on systems engineering through automotive R&D. Additionally, universities are doing a better job making their facilities, lab space and infrastructure available to private industry. This has taken many forms, from contract research and licensing agreements to Entrepreneur-In-Residence programs where investors and corporate send their brightest minds into academia for a time to understand the latest research and assess the business model and economic implications of the latest technologies. Regardless of whether universities opt to partner with large or small businesses, collaborative efforts between universities and the private sector capitalize on the variety of resources available to both, and efforts range from individual projects to broader engagement across disciplines. Companies reap benefits from sharing laboratory and incubator space that pull together the combined intellectual capital of industry and academic experts (Box 4.2). In the later stages of technology development and ★ U.S. Department of Commerce ★ The Office of Innovation and Entrepreneurship at the Economic Development Administration ★ 32

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