Why Commercialize University Research?

When I left private enterprise and came to the university, I was confronted with this question. The question isn’t should universities commercialize their research but rather why? The should question has explored in another post. As I explored the why question, it became clear that the answer depended on who was being asked. So these are the answers I got.

Why Commercialize University Research?

To solve some of the world’s biggest problems. This comes from a high-level university official (Chancellor, President) or from the Board of Trustees. The response is in line with the mission of the university: education, research, and service.

To recruit and retain talented faculty. This perspective often comes from a department chair, provost, or VP/VC of research. Many faculty, especially  younger faculty, see the commercialization of their research as an extension of their academic careers. To let their innovative research languish in the bowels of the tech transfer office or create significant barriers to spinning out a company can be discouraging for talented faculty.

To have an economic impact. University administrators, especially from universities that receive significant state funding, are quick to point to this. The fact is, most startups created founded on university research tend to stay in the state they were founded and create jobs in those states. For example, a report examining in impact of University of Utah spinouts showed “university startup companies directly or indirectly generated 15,767 jobs, $754.5 million in personal income and $76.6 million in tax revenue in 2009”.

To get a return on the university’s investment. Each year, the university invests in the research infrastructure, generally, and more specifically transfer activities (personnel, patent costs, etc). With increased competition for overhead dollars, universities are seeking additional sources of funding to cover these costs. Thus, many turn to commercialization activities, namely licensing revenue and equity in university startups.

Given the many reasons for commercializing university research, it is important to align these stakeholders in developing an university entrepreneurial ecosystem. A Chancellor, a VP of research, and faculty member may each see different reasons to support such an effort and each may have a different approach to how that support is deployed.

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