Commercialization Trends and Insights across Academe, Industry, and Federal Labs Dr. Carlos A. Kemeny Assistant Director Office of Innovation and Strategic Investment University of Texas System
Commercialization Mission and Strategic Objectives in Academe
Commercialization Mission: Perception
Commercialization Gap: Licensing Revenue Source: Association of University Technology Managers Licensing Surveys, 2003-2015
Commercialization Gap: Efficiency FY2014 $0.078 licensing revenue generated for every $1.00 of research expenditures FY2014 $0.023 licensing revenue generated for every $1.00 of research expenditures Source: Association of University Technology Managers Licensing Surveys, 2003-2015
One Explanation: Leveraging Legal Fees Source: Association of University Technology Managers Licensing Surveys, 2003-2015
Criticality of Alignment in a Rapidly Changing Environment
Future of Commercialization
Hurdle to Overcome: Connecting the Dots
Commercialization Trends and Insights Startup Perspective Raghav Mahalingam, Ph.D. President, Founder, TMR Labs Lecturer, UT Austin April 27, 2017
Number of University Startups initiated # of university TTO offices over time Year # Universities with TTOs 1979 30 1999 174 2012 206 1998 Association of University Technology 2012 Managers (AUTM) survey https://www.brookings.edu/wp- content/uploads/2016/06/valdivia_tech- Transfer_v29_No- Embargo.pdf 700 100 Number of university start- ups continue to grow as TTOs have matured from a pure licensing model to a startup incubator model
Post- Research Startup Funding Ecosystem Early Stage Valley of Death Growth University Commercialization Grants NSF- I Corp SBIR/STTR- Phase I Phase II Phase III Angels Early Stage VC Traditional VC Federal funding supports companies in their most vulnerable state
Federal Funding Insights NSF I- Corps 1 Crash course on Lean Startups for university researchers Over 900 teams (as of Nov 2016), 50% went on to start companies Great vehicle for early market research Most importantly, it helps creates a change in mindset from innovation to commercialization 1. https://www.slideshare.net/meyersa/nsf- i- corps- sites- webinar- slides- without- narration
Federal Funding Insights SBIR/STTR 2,3 Top 5 awardees of SBIR funds Out of approx. 5000 awardees each year, 10 companies get ~20% of the awards 2. http://www.nature.com/news/us- research- firms- put- under- pressure- to- sell- 1.13354 3. https://www.fundera.com/blog/sbir- program
Federal Funding Insights SBIR/STTR SBIR/STTR funded companies regularly bring great ideas to fruition However, in large part, the focus is applied research and not commercialization A small fraction of revenues is from actual commercial product Intent : Innovation or Commercialization?
SBIR vs STTR from University Startup Perspective SBIR Encourage Small Business Innovation STTR Encourage public- private partnerships ~2.5$ agency budget 0.3% agency budget Phases I, II, II Only Phase I, II STTR funding still just a fraction of SBIR funding https://www.brookings.edu/wp- content/uploads/2016/06/valdivia_tech- Transfer_v29_No- Embargo.pdf
Focus on Commercialization Evaluate success of companies using Non- grant revenue (product or licensing) Non- governmental funding raised # products launched Repeat funding should take into account the above Incentivize funding agency itself? Should the agency take a stake in any company getting Phase II/III awards? This will create closer engagement as well as potential for sustaining revenue stream for agency Enables funding a larger pool of startups focused on commercialization
Funding Gap for Hardware Startups 4 Gap currently being filled by state- backed Chinese VCs. SBIR/STTR could be vehicles that focus more heavily on filling this gap 4. http://www.businessinsider.com/formation- 8- to- invest- 100- million- on- hardware- startups- 2015-5
Summary Federal funds via NSF I- Corp and SBIR/STTR very critical to startups Focus on commercialization vs innovation will enable more startups More emphasis on hardware will fill a big gap in VC funding for hardware startups
Commercialization Trends and Insights An Industry Perspective Rick Lipsey Senior Strategic Cyber Lead LMI April 27, 2017
MORE THAN 55 YEARS OF PUBLIC SERVICE Founded in 1961 under the Kennedy administration to bring the best minds to bear on solving our government s most complex management problems.
ABOUT US LMI is a consulting firm dedicated to improving the management of government. With more than 1,000 consultants, we design and implement solutions to some of the toughest problems facing government managers in logistics, information technology, and resource allocation. For 55 years, LMI has placed our clients interests first. INSIGHT Our innovative problem solving provides valuable insights into possible solutions. OBJECTIVITY Our independence ensures we operate free from conflicts of interest. PRACTICAL RESULTS Our solutions are outcome driven and results oriented. SHARED PURPOSE Our shared spirit of public service and deep knowledge of government operations enhance our recommendations. SIGNIFICANT VALUE Our net revenue supports our mission, not shareholder return, delivering more value for the dollar. 22
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LMI Research Institute LMI invests profits into research and solution development focused on solving the problems of our government clients. Public mission: advancement of education or science Meaningful, impactful solutions for government managers The LRI supports LMI s charitable mission by providing programs, tools, and resources that foster innovative ideas and support execution in sync with strategic growth opportunities
Multiple Programs, One Focus: Addressing Our Clients Problems Innovation / Independent Research and Development Academic Partnerships Publication Assistance Distinguished Speakers
LMI Academic Partnerships Program The overarching goal of LMI s Academic Partnerships Program is to create a mutually beneficial relationship for LMI and its partners. 10 participating partners Partner Benefits Sponsored Research. Access to funding for sponsored research that aligns with LMI s research interests Bridge to Government. Gain insight into challenges facing the federal government Marketing. Acknowledgment as a partner of LMI on our website and other relevant publications
Sponsored Research Interests LMI has recently sponsored research in the following areas of interest Using Big Data to improve supply chain decision- making Leveraging technology for supply chain risk mitigation in developing countries Recovery Metrics: How do you define success? Social media and community resilience* Building cyber response teams* Application of the Internet of Things* Evaluation of autonomous vehicles Collaborative product development and sustaining engineering Building relationships in distributed workforces Integrating healthcare data Risk management and cybersecurity* *Note: LMI has funded research with UTSA in these areas of interest
LMI and UTSA UTSA and LMI established their partnership in 2013 The partnership allows UTSA and LMI to address some of the nation s most critical challenges in energy and cyber security, leveraging the knowledge and research of UTSA s Texas Sustainable Energy Research Institute, and the Institute for Cyber Security (ICS). UTSA President, Ricardo Romo, and LMI President and CEO, Nelson M. Ford, signed a memorandum of understanding to enact the partnership on July 12, 2013 at UTSA s campus in San Antonio. The LMI- UTSA partnership aims to: build and enhance strategic partnerships between UTSA faculty and LMI experts, leverage academic expertise to accelerate research and development and support a strong technology base, obtain access to leading research in areas aligned to LMI s program groups and client needs, grow LMI and UTSA talents in new and existing research areas, and introduce leading university faculty and students to LMI and its mission.
Success in Partnership LMI and UTSA Partner to Create Cybersecurity Standards Organization for DHS LMI is part of a team led by the University of Texas at San Antonio that was recently awarded a five- year, $11 million grant from the U.S. Department of Homeland Security (DHS) to create standards for sharing information that will improve the nation s cybersecurity posture across all sectors. The Center for Infrastructure Assurance and Security (CIAS) will lead LMI, UTSA, and the Retail Cyber Intelligence Sharing Center s (RCISC s) efforts to create an Information Sharing and Analysis Organization (ISAO). The ISAOs will use the guidelines to communicate with industry, government, and other stakeholders to improve national cybersecurity. LMI and UTSA will lead a voluntary consensus standards development process to engage industry, government, and academia to share their needs and expectations in preventing and responding to cyber attacks. While many acknowledge that national and economic security is threatened by these attacks, concerns about personal privacy and the protection of confidential business information have slowed the process for standardizing critical information sharing. The DHS grant aims to tackle this issue.
Bridging the Divide Between Industry and Academia Focus Timelines Culture
Lessons We re Learning Build Robust Partnerships Align to Common Goals Communicate, Communicate, Communicate
Rick Lipsey RLipsey@lmi.org 210-526-8186
Commercialization Trends and Insights Federal Labs Perspective Courtney Silverthorn, Ph.D. Deputy Director, Technology Partnerships Office National Institute of Standards and Technology April 27, 2017
Objectives of Commercialization Government Research/Invent Regulate Public benefit Consumer Industry Develop Manufacture Distribute Market Sell
Trends in Federal Tech Transfer Trends in Federal Technology Transfer Activities (FY 2011 - FY 2014) 170 160 Index Value (FY 2011 = 100) 150 140 130 120 110 100 90 Federal Intramural Research Budget New Inventions 80 FY 2011 FY 2012 FY 2013 FY 2014
Trends in Federal Tech Transfer
Challenges Ethics vs Entrepreneurship Incentivizing Researchers Messaging and Communication
Looking to the Future Quantitative and qualitative data Mythbusting Budgets =??
Courtney Silverthorn, Ph.D. courtney.silverthorn@nist.gov 301-975-4189