The Truth About The Lost Revenue of Tech Transfer

Higher education is under fire. With costs spiraling upward, student applications down, a new excise tax levied on endowments, universities large and small are grappling with their fiscal foundation. Yet, if university presidents take the time to glance inward, they may find a strong contributor to revenue within their hallowed halls; in the tech transfer office. If the operations there are run with dispatch, that is.

In working with clients I find that many universities are missing out on significant revenues because they have lost track of the ultimate goal of their federally funded research, that being commercialization. In fact, a Brookings Institute study found that most schools don’t even earn enough from their licensing revenue to cover the operating costs of their technology transfer offices. This situation needs to be remedied. I see this problem as twofold; (1) universities could do a better job of promoting their inventions and making the connections to industry and (2) because of the ever-moving demands upon licensing officers a significant number of agreements are filed away with scant attention to follow up. As with anything, the devil is in the details and proper execution of licensing terms over time can make a big difference.

This latter issue is administrative and imminently solvable. Important details such as terms of the licensing contract, the nature of the partnering relationship, when progress reports and payments are due, and payments due inventors. Multiple departments, including the researchers and finance, need to work together to get this right but the buck stops at the tech transfer office. A disciplined process that is tailored to each academic organizational structure will need to be defined to cover the gaps. In addition, roles and resources in the tech transfer office may need to be reassessed to accomplish the task.

After all, commercialization of research for the public good was the original intent of the Bayh-Dole Act when it was passed 38 years ago. Ultimately, managing the licensing process well is not only about recouping a revenue stream but also serves as a reminder to the university of its responsibility as the ultimate steward of innovation.

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