A longitudinal comparative study of university research commercialisation performance: Australia, UK and USA

Innovation: Management, Policy, & Practice, Oct, 2006 by John Yencken, Murray Gillin

SUMMARY

Research commercialisation surveys are now available for Australia for Financial Years (FY) 2000 and 2002. This paper reviews longitudinal comparative data for research commercialisation performance in Australia, the United Kingdom and the USA. It discusses commercialisation performance measures, with a specific focus on entrepreneurial spin-off companies, and performance comparisons are made based on research expenditure in US dollars adjusted for purchasing power parity. Conclusions from these analyses suggest that, in recent years, Australian public agency performance in generating spin-offs per unit of research expenditure, adjusted for purchasing power parity, has been comparable or superior to some universities in other countries reviewed. However, Australian university revenue from intellectual property licensing royalties and research contracts has been below that of other countries studied. Analysis suggests that this results from problems in both demand--low business investment in R&D and hence low technology absorptive capacity--and supply, that is lack of time and lack of incentive to academic researchers to develop contacts with and meet the expectations of industry and other research users for technology that works.

KEYWORDS

commercialisation; innovation; intellectual property; research; universities

INTRODUCTION

Fundamentally new ways of understanding the world will come out of ... basic research and with that will come new technologies and business opportunities.

(Emeritus Professor Barry Ninham, 2000)

Innovation is not just the idea--innovation is only achieved when the idea has been transferred into an outcome which has value (Livingstone 2000).

The translation of knowledge into economic activity has emerged as a recognised university function, alongside research and teaching (Etzkowitz and Leyesdorff 1997: 1).

These three quotations illustrate well the environment in which commercialisation of research outcomes takes place: firstly, the importance of maintaining an adequate level of basic research; secondly, that innovation is about wealth creation; and thirdly, the increasing expectations for universities and other research providers.

Research commercialisation surveys are now available in Australia for FY 2000 and 2002. This paper reviews longitudinal comparative data for research commercialisation performance in Australia, the United Kingdom and the USA. Commecialisation performance measures with a specific focus on entrepreneurial spin-off companies are discussed and performance comparisons have been made based on research expenditure in US dollars adjusted for purchasing power parity. Earlier research by the present authors suggested the use of purchasing power parity as preferable to currency exchange rates in making international comparisons (Yencken 2004).

GLOSSARY AND COMPATIBILITY OF DEFINITIONS

As a first step, it is essential to clarify and define the various constructs involved, to ensure that compatible definitions are used when comparing commercialisation performance between countries.

Commercialisation

The process of converting science and technology, new research or an invention into a marketable product or industrial processes.

(Scottish Enterprise 1996)

Disclosure

An invention disclosure occurs when a device, substance, method or process that is apparently new, useful and involves an inventive step is made known to personnel within an institution who have responsibility for managing the institution's research commercialisation activities.

(ARC 2002)

Licenses, options, agreements (LOAs)

Australian definition:

The term 'licensed technology' refers to a technology that becomes a product to be sold or to a technology that is a process that is put into commercial use as opposed to developmental use by a company. For the purpose of this survey, license, option and assignment agreements were defined as follows:

* A licence agreement formalises the transfer of technology between two parties, where the owner of the technology (the licensor) permits the other party (the licensee) to share the rights to use the technology;

* An option agreement grants the potential licensee a time period during which it may evaluate the terms of the license agreement. An option agreement is not constituted by an option clause in a research agreement that grants rights to future inventions, until an actual invention has occurred that is subject to that option; and

* An assignment agreement conveys all right, title and interest in and to the licensed subject matter to the named licensee.

(ARC 2002)

The US Association of University Technology Managers (AUTM 1998: 30) was involved in the FY 2000 Australian Commercialisation survey and, as expected, its definitions were identical.

In the OECD definitions (OECD 2003: 30), the only relevant definition was Right of First Refusal, which might be considered as an Option. No comparable definition of Licences was given.

Spin-offs and start-ups

The definition used in the Australian survey (DEST 2002: 94) was: