Accelerating technology transfer from federal laboratories to the private sector--the business development wheel

Engineering Management Journal, Sep 2001 by Linton, Jonathan D, Lombana, Cesar A, Romig, A D Jr

Abstract

In this paper, we suggest a way to maximize economic utilization of science and technology from federal laboratories-the Business Development Wheel (BDW). Commercializing federally developed science and technology is challenging because the science and technology must first be transferred to a private organization and then brought to market. Historically, many important advances manage to migrate from federal laboratory to market, but this journey often relied on fortuitous events. Recent developments have, however, improved the process at some laboratories. The BDW offers a framework to assist in the commercialization process. This model is based on the experience and strategy of Sandra National Laboratories in the commercialization of its portfolio of science and technology. A portion of this work has been supported by Sandra, a multiprogram laboratory operated by Sandra Corporation, a Lockheed Martin Company, for the United States Department of Energy under Contract DE-AC04-94AL85000.

Introduction

The Importance of Federal R&D in Today's Economic Environment. Federal laboratories, driven by national needs, have developed many important products and technologies. For example, clean room technology used by the semiconductor industry was developed at Sandia decades ago. Similarly, advances in microelectromechanical-systems (MEMS), an important set of process technologies vital for product miniaturization, are occurring at Sandia. Each of the more than 500 federal laboratories in the U.S. is a source of research and development (R&D) that contributes to America's economic vitality, productivity growth, and technological innovation.

However, industry uses only a fraction of the science and technology available at federal laboratories. Federal labs do not usually apply the business development processes necessary to work effectively with industry in technology commercialization. This article addresses one model that can assist in translating underutilized technologies into profitable products in the industrial sector, and draws on the commercialization experience and strategy of Sandia. This represents an important contribution, since a substantial percentage of industrial patents are based on science funded by government through universities and labs (NSF, 2000).

Government Encourages Industrial Collaborations. In 1980, Congress enacted the Stevenson-Wydler Technology Innovation Act, making transfer of federal technologies to localities, states, and industries a national policy (U.S. Senate, 1986). To further encourage technology transfer from federal labs, Congress amended the act in 1986 to authorize federal labs to enter into Cooperative Research and Development Agreements (CRADAS) with companies and universities. In 1999, Neal Lane, then assistant to the president for science and technology, announced a call for issues papers to identify priorities for reforming federal policy to enhance innovation and economic competitiveness. Congress, federal policy makers, and the executive offices of the federal laboratories recognize the importance of private-public partnerships in innovation and economic competitiveness. However, industry and federal laboratory personnel have the task of implementing and maintaining working relationships to their mutual advantage. Such relationships occur only when driven by industry finding value in something owned by a federal laboratory.

Innovation provides a competitive advantage. Yet, industry toils to reduce costs, including expenditures, on innovative R&D. Searching for a balance between innovation and cost reduction should encourage collaborations, partnerships, acquisitions, and mergers between firms and federal laboratories.

This article considers Sandia's approach to the issue of business development and commercialization of federal laboratory technology and innovation. Sandia is a large research facility with about 7,800 employees. Sandia has always focused on application instead of theory. This is rooted in the history of Sandia-an offspring of the Manhattan Project. The core mission of Sandia includes the design and development of all non-nuclear components and system integration of U.S. nuclear weapons. Succeeding in this mission requires a strong basic and applied science base. Sandia has capabilities in a variety of areas, including: systems engineering; weapons monitoring; encryption; supercomputing; renewable energy; engineering materials; development; prototyping; limited manufacturing; and the design and manufacture of both electronic and mechanical micro devices. The wide range of activities-basic science through manufacturing-coupled with Sandia's size creates a large number of commercialization opportunities at different stages of life-cycle development (Foster, 1986). Sandia provides a good example of the activities and strategies required for commercialization of science and technology in the context of a federal laboratory.

Business Development in a Federal Laboratory