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Hatching New Ideas, from Tech Transfer to Incubation

Colleges and universities are under increasing pressure to be more entrepreneurial and improve their impact on economic growth, job creation, and competitiveness. Additionally, higher education institutions face greater recruiting challenges, with many colleges and universities vying for the same quality professors, faculty and students from around the world. The way schools have addressed these issues has evolved over the last 30 years, inspiring new, creative curriculums and giving students new options to explore entrepreneurship.

 A Tradition of Tech Transfer

Historically, as a way to remain relevant and competitive, academic institutions have focused on improving technology transfer, the complex work that takes place at the intersection of research and commercialization. Over the last three decades, schools have revamped their technology transfer capabilities in order to seize the opportunities presented by patent system reforms such as:

  • The Bayh-Dole Act of 1980 which gives universities the right to take title to inventions made from federal research grants;

  • Supreme Court decisions that expand patentable matter; and

  • The new first-to-file system and other reforms brought by the America Invents Act.

For many years, the emphasis was largely on licensing patents, which was the mission of the university technology transfer office (TTO). However, it can be challenging for some universities to generate significant revenue from this model, and difficult for TTO companies to build sustainable businesses. One of the major hurdles has been the gap between research and conversion to commercial products.

Incubating Student Innovation

In recent years, colleges and universities have reconsidered their role in the innovation system. Rather than a linear system that supports invention in the hopes of landing a blockbuster patent, schools have seen the benefits of supporting an “innovation ecosystem” on campus. As a result, the startup incubator has emerged, which aims to give the student entrepreneur access to a broad array of resources, including education, laboratories and other facilities, investment capital, mentorship, and legal counsel.

With this alternative model, the school can help drive innovation, but may not own the resulting invention. Rather, the school “incubates” the development of new ideas and innovations by helping early-stage ventures to survive and grow during the startup period – a time when they are most apt to fail. On-campus incubators provide student entrepreneurs with a range of support services and resources tailored to meet their unique needs. By devoting resources to support campus entrepreneurs and partnering with business advisors and capital investors, colleges and universities are creating a nurturing environment for these nascent enterprises.

It’s Working

Campus incubators are growing exponentially. According to the National Business Incubation Association (NBIA), as of October 2012, approximately one-third of the 1,250 incubators in the United States were at universities, up from one-fifth in 2006. Today, there are an estimated 7,000 business incubators worldwide. Incubators are no longer found only at technology-centric schools such as MIT, and not just in Boston and Silicon Valley. Even non-tech campuses such as Northern Kentucky University, Duke and Syracuse now have incubator programs.

The on-campus incubation model continues to adapt to meet a variety of needs, from fostering commercialization of university technologies to increasing employment in economically distressed communities to serving as an investment vehicle.

Research conducted by the NBIA states that on-campus incubators can reduce the risk of small business failures. For example, in 2011, North American incubators assisted about 49,000 startup companies that provided full-time employment for nearly 200,000 workers and generated annual revenue of almost $15 billion. Perhaps most telling, is that, according to the NBIA, 87 percent of all companies that have graduated from their incubators are still in business. These newly hatched companies create jobs, revitalize neighborhoods and commercialize new technologies, thus strengthening local, regional, and even national economies.

Whether through tech transfer or incubation, higher education institutions are well-positioned to support entrepreneurship on campus, attract top talent, and help hatch new innovations.

©2020 Greenberg Traurig, LLP. All rights reserved.

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About this Author

Chinh Pham, Greenberg Traurig Law Firm, Boston, Intellectual Property Attorney
Shareholder

Chinh H. Pham is Co-Chair of the Emerging Technology Practice and is a registered patent attorney with experience in the strategic creation, implementation and protection of intellectual property rights for high technology and life science clients.

Chinh advises clients, ranging from start-ups to established companies, on the creation and development of patent portfolios through the preparation and filing of patent applications, the acquisition and exploitation of intellectual property rights through licensing and strategic collaboration...

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