University-Industry Relationships:University-Industry Relationships:

Experiences from Austin Texas, the Experiences from Austin Texas, the University of Texas, and University of Texas, and

ICIC22 Institute Institute

PRESENTED TO PRESENTED TO

Colombian Industry Networks Colombian Industry Networks

July 4, 2009July 4, 2009

Dr. Elsie Echeverri-CarrollResearch Professor and

Director Economic DevelopmentIC2 Institute

e.carroll@mail.utexas.edu

University-Industry Links—Literature ReviewUniversity-Industry Links—Literature Review

Reamer A, Icerman L, Youtie J (2003) Reamer A, Icerman L, Youtie J (2003) Technology Transfer and Technology Transfer and Commercialization—Their Role in Economic DevelopmentCommercialization—Their Role in Economic Development. . Economic Development Administration, U.S. Department of Economic Development Administration, U.S. Department of Commerce, Commerce, http://www.eda.gov/ImageCache/EDAPublic/documents/pdfdocs/eda_5fttc_2epdf/v1/ehttp://www.eda.gov/ImageCache/EDAPublic/documents/pdfdocs/eda_5fttc_2epdf/v1/eda_5fttc.pdfda_5fttc.pdf

Ankrah, SN (2007) Ankrah, SN (2007) University-Industry Inter-organizational University-Industry Inter-organizational Relationships for Technology /Knowledge Transfer: A Systematic Relationships for Technology /Knowledge Transfer: A Systematic Literature ReviewLiterature Review, ISSN nr 1743-6796, Leeds University Business , ISSN nr 1743-6796, Leeds University Business School. School. http://lubswww.leeds.ac.uk/researchProgs/fileadmin/user_upload/ANKRAH1.pdfhttp://lubswww.leeds.ac.uk/researchProgs/fileadmin/user_upload/ANKRAH1.pdf

Agrawal, Ajay (2001) University-to-Industry Knowledge Transfer: Agrawal, Ajay (2001) University-to-Industry Knowledge Transfer: Literature Review and Unanswered Questions” International Literature Review and Unanswered Questions” International Journal of Management Review, Vol 3, Issue 4, pp. 285-302.Journal of Management Review, Vol 3, Issue 4, pp. 285-302.

Feldman MP and Breznitz SM (2009) “The American Experience in Feldman MP and Breznitz SM (2009) “The American Experience in University Technology Transfer” In McKelvery M and Homen M University Technology Transfer” In McKelvery M and Homen M (Eds) Learning to Compete in European Universities. Edward Elgar (Eds) Learning to Compete in European Universities. Edward Elgar Publishing. Publishing.

The Austin Technopolis

The University of Texas

Who Benefit from Stronger U-I Links?

U-I Links—Characteristics of the FirmU-I Links—Characteristics of the Firm ““absorptive capacity” = Firm’s R&Dabsorptive capacity” = Firm’s R&Dt-nt-n (Cohen and Levinthal 1990) (Cohen and Levinthal 1990) ““absorptive capacity” = Firm’s connectedness to the open science absorptive capacity” = Firm’s connectedness to the open science

community (e.g. Public R&D; co-authored papers with scientists outside community (e.g. Public R&D; co-authored papers with scientists outside the firm) (Cockburn and Henderson 1998, Lim 2000)the firm) (Cockburn and Henderson 1998, Lim 2000)

IBM Research in Austin

AMD Austin

University of Texas

$1 milliongift to computer engineering2007

$11.1 millionin funding fromthe Defense Advanced ResearchProjects Agency toCollaborate super chip(2003)

Firm’s Patent ProductivityFirm’s Patent Productivity

Firm’s links with community of science (Lim 2000)Firm’s links with community of science (Lim 2000) Firm’s links with start university scientists (Zucker et. al. Firm’s links with start university scientists (Zucker et. al.

2000)2000)

Firm’s patents productivity= # of important patents

• Universities• Other Firms• R&D Labs

2.Start university scientists

1. Community of Science

Firm A

Firm B

• Sponsoring research• Participating in Research consortia• Partnering with other companies

Firms’ CharacteristicsFirms’ Characteristics

What we know for the United What we know for the United StatesStates “There are differences in the “There are differences in the degree to which firms are capable of degree to which firms are capable of effectively utilizing university effectively utilizing university research to their benefit and these research to their benefit and these differences vary systematically with differences vary systematically with the degree to which firms are the degree to which firms are connected to the university” connected to the university” (Agrawal 2001)(Agrawal 2001)

Firm CharacteristicsFirm Characteristics What we do not knowWhat we do not know

• We have only begun to investigate the various mechanism by We have only begun to investigate the various mechanism by which knowledge is transferred to firms from the universitieswhich knowledge is transferred to firms from the universities

• Feldman and Breznitz (2009):Feldman and Breznitz (2009): Formal mechanisms that falls under the umbrella of the TTO: Formal mechanisms that falls under the umbrella of the TTO:

sponsored research agreements with industry; invention sponsored research agreements with industry; invention disclosures, patents; licenses of university intellectual property to disclosures, patents; licenses of university intellectual property to firms; and the formation of spinoffs companiesfirms; and the formation of spinoffs companies

Informal mechanisms that do not fall under the umbrella of TTO: Informal mechanisms that do not fall under the umbrella of TTO: industry hiring of students, faculty consulting, and knowledge industry hiring of students, faculty consulting, and knowledge trading among friendship networkstrading among friendship networks

• Are there cultural differences across countries?Are there cultural differences across countries?

• There is a lack of longitudinal studies to test whether short There is a lack of longitudinal studies to test whether short term links lead to long-term linksterm links lead to long-term links

U-I Degrees of Tech Transfer FlowsU-I Degrees of Tech Transfer Flows

High

Few Weeks(Phase 1)

1-3 years(Phase 2)

Many years(Phase 3)

Duration of the Relationship

Expected

Technology flow to firms

Low

Training PublicationsGrantsFellowshipsScholarshipsdonations

Patent licensingSponsor researchFaculty consultingPersonal exchange

Technology parkIndustrial incubators

Source: Graph by Ankrah (2007) based on information from Chen (1994)

University CharacteristicsUniversity Characteristics

The rapid growth in U.S. universities The rapid growth in U.S. universities patenting and licensing activity (Thurby patenting and licensing activity (Thurby and Thursby 2000)and Thursby 2000)

Licensing Activity Licensing Activity Equity versus cash Equity versus cash from royalties (Feldman et. al. 2000)from royalties (Feldman et. al. 2000)

Which technologies are more easily Which technologies are more easily licenselicense technologies in very early technologies in very early embryonic stages (50% proof of concept embryonic stages (50% proof of concept and 50% lab-scale prototype) (Jensen and and 50% lab-scale prototype) (Jensen and Thursby 1998)Thursby 1998)

National Research and Development National Research and Development By 1979, industry R&D expenditures passed government expending growing more than By 1979, industry R&D expenditures passed government expending growing more than

three-folds after controlling for inflation between 1975 and 2000 (Litan et al 2007)three-folds after controlling for inflation between 1975 and 2000 (Litan et al 2007)

0

50,000

100,000

150,000

200,000

250,000

Millions of Constant 2000 Dollars

Federal Industry

Source: National Science Foundation, 2008

US Universities by Source of R&D Funding US Universities by Source of R&D Funding from the Federal G and Industryfrom the Federal G and Industry

0

5,000

10,000

15,000

20,000

25,000

30,000

Millions of 2000 Dollars

Source: National Science Foundation, 2009

Industry

Federal Government

Industry Funding of University Research, 1973-2005Industry Funding of University Research, 1973-2005

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Percent

Source: National Science Foundation, 2008

$2.6 billion(2006)

Outsource of R&D?

University CharacteristicsUniversity Characteristics

What do we do not knowWhat do we do not know • We know very little about the amount We know very little about the amount

and type of technology transfer that and type of technology transfer that occur outside the formal route of the occur outside the formal route of the TTOTTO non-patent-related links. non-patent-related links.

• Why professors become involve with Why professors become involve with the commercialization of their the commercialization of their invention?invention?

• Are there differences across countries?Are there differences across countries?

Channels of CommunicationChannels of Communication

Firm characteristicsUniversity characteristics

?

Different industries value different Different industries value different channels differentlychannels differently

High

Expected

Technology flow to firms

Low

TrainingRecruiting of students PublicationsConferencesInformal conversationsGrantsFellowshipsScholarshipsdonations

Patent licensingSponsor researchFaculty consultingPersonal exchange

Technology parkIndustrial incubators

Source: Cohen et al (1998, 2000)

Industry Set 1

Industry set 2

Overall these channels are moreimportant

Firms use different channels to access Firms use different channels to access university knowledgeuniversity knowledge

High

Firms

Expected

Technology flow to firms

Low

Publications

Patent licensing

Technology parkIndustrial incubators

Source: Agrawal and Henderson (2000)

Firm 1

Firm 2

Benefit to Firms and UniversitiesBenefit to Firms and Universities

Funding from LicensesFunding from LicensesThe median net royaltyThe median net royalty

per university respondent toper university respondent to

the AUTM surveys overall the AUTM surveys overall

climbed from $440,000 in 1996climbed from $440,000 in 1996

to $950,000 in 2005.to $950,000 in 2005.

Most royalties from licensing agreementsMost royalties from licensing agreements

accrue to relatively few patents and relativelyaccrue to relatively few patents and relatively

few universities that hold them.few universities that hold them.

Research is starting to indicate that firms Research is starting to indicate that firms

will benefit significantly by investing inwill benefit significantly by investing in

the types of relationships thatthe types of relationships that

are not necessarily in the presenceare not necessarily in the presence

of efficient market such as those different fromof efficient market such as those different from

patents and licensing agreements (e.g., conferences, joint publications)patents and licensing agreements (e.g., conferences, joint publications)

Most Respected Literature on U-I Most Respected Literature on U-I

Relationships in the U.S.Relationships in the U.S. Econometric models and estimation Econometric models and estimation

techniquestechniques

Limitation of this literatureLimitation of this literature Data Data provided by Association of University provided by Association of University Technology Managers (AUTM): Technology Managers (AUTM): patents, licensing agreements, patents, licensing agreements, university start ups.university start ups.

International Literature Review International Literature Review

36

12

2 13

0

5

10

15

20

25

30

35

40

USA UK Australia Mexico Canada

Number of Studies Reviewed

Source: S.N. Ankrah, "University-Industry Interorganisational Relationships for Technology/Knowledge Transfer: A Systematic Literature Review," 2007.

The Colombian Case: Existing ReviewThe Colombian Case: Existing Review

Tognato, Carlo (2005) “Comercializar la Tecnologia Tognato, Carlo (2005) “Comercializar la Tecnologia Generada desde las Universidades: Un Reto Institucional” Generada desde las Universidades: Un Reto Institucional” Revista de IngenieriaRevista de Ingenieria, Universidad de los Andes., Universidad de los Andes.

Abello Llanos, Raimundo (2007) Factores Claves en las Abello Llanos, Raimundo (2007) Factores Claves en las Alianzas Universidad-Industria como Soporte de la Alianzas Universidad-Industria como Soporte de la Productividad en la Industria local: Hacia un modelo de Productividad en la Industria local: Hacia un modelo de desarrollo economico y social sostenible. desarrollo economico y social sostenible. Investigacion y Investigacion y DesarrolloDesarrollo, 15 (001): 208-225. , 15 (001): 208-225.

Vesga, Rafael (2008) “Emprendimiento e innovacion en Vesga, Rafael (2008) “Emprendimiento e innovacion en Colombia: Que nos esta haciendo falta?” Available at the Colombia: Que nos esta haciendo falta?” Available at the WEB. WEB.

Colciencias (2008) Colciencias (2008) Colombia construye y siembra futuroColombia construye y siembra futuro

Gasto en I+D por sector como % del PIB

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

Colombia Venezuela Argentina Mexico Chile Brasil UnitedStates

Privada Pública y Universitaria

Source: Organizacion Mundial de la Propiedad Intelectual, 2000-2002.

RegionsRegions

• Jaffe (1989)Jaffe (1989) Industrial Patents = Industrial Patents = F[R&D’s UNIV] in statesF[R&D’s UNIV] in states

• Both theoretical and empirical literature Both theoretical and empirical literature has shown that university research has shown that university research positively influences the capacity for positively influences the capacity for innovation of the surrounding firms innovation of the surrounding firms ((Jaffe, 1989Jaffe, 1989; Mansfield 1991, 1998; ; Mansfield 1991, 1998; Nelson and Rosenberg 1993; Zucker, Nelson and Rosenberg 1993; Zucker, Darby, and Armstrong 2001; Cohen, Darby, and Armstrong 2001; Cohen, Nelson, and Wash 2002). Nelson, and Wash 2002).

Triángulo de Sábato o Triángulo de Sábato o triple hélicetriple hélice??

Sabato, Jorge A y Botana, Natalio (1968). “La Ciencia y la Sabato, Jorge A y Botana, Natalio (1968). “La Ciencia y la Tecnologia en el Desarrollo Futuro de America Latina.” Tecnologia en el Desarrollo Futuro de America Latina.” Revista Revista de la Integracionde la Integracion No 3, Buenos Aires, Noviembre 1968. No 3, Buenos Aires, Noviembre 1968.

Source: Luis Enrique Gamboa, April 2008. Innovar para Producir: Un Reto para el Gobierno, la Universidad y la Empresa, Availabel at the WEB.

The Technopolis FrameworkThe Technopolis Framework

networksnetworks

Large

Large

Compan

ies

Compan

ies

EmergentEmergentCompaniesCompanies

LocalLocal

Government

Government

Support

SupportGroupsGroups

Ed

uca

tio

nE

du

cati

on

Sta

teS

tate

Go

vern

men

tG

ove

rnm

ent Federal

Federal

Government

Government

Gibson D, Kozmetsky G, and Smilor R (1988)

Support/Networking Groups Support/Networking Groups are very importantare very important

Austin has at least one networking event every day with Austin has at least one networking event every day with cultural/sport/recreation events on every weekend. cultural/sport/recreation events on every weekend. People get networked! People get networked!

• Chamber of CommerceChamber of Commerce• Business and community groupsBusiness and community groups• Professional associationsProfessional associations• Entrepreneurial/IndustryEntrepreneurial/Industry AssociationsAssociations• The Austin Technology CouncilThe Austin Technology Council

1990 - 2000 Austin Enjoyed 1990 - 2000 Austin Enjoyed Spectacular Economic Spectacular Economic

Growth Growth Why and How?Why and How?

The Austin ModelThe Austin Model

0

5,000

10,000

15,000

20,000

25,000

30,000

'95 '96 '97 '98 '99 '00 '01 '02

$0

$10

$20

$30

$40

$50

Sales, in

$billions

U.S. Employees

Sales

20,200 20,200 employeesemployees

Dell’s Spectacular GrowthDell’s Spectacular Growth

In the early 1980s Austin was the state In the early 1980s Austin was the state capital and a university town with a capital and a university town with a cowboy/ranching culture – the city was cowboy/ranching culture – the city was NOT known for high tech. Jobs were NOT known for high tech. Jobs were mostly in government and education – mostly in government and education – the area could not retain its educated the area could not retain its educated talent.talent.

In the late 1980s Austin was most known In the late 1980s Austin was most known for “see through” buildings and a for “see through” buildings and a depressed economy NOT entrepreneurship, depressed economy NOT entrepreneurship, venture capital, and technology-based venture capital, and technology-based growth. growth.

10 Years Later: 10 Years Later: The Best U.S. Cities for Business – The Best U.S. Cities for Business –

Top Five Wealth CreatorsTop Five Wealth Creators

1. Austin1. Austin

2. Las Vegas2. Las Vegas

3. Salt Lake City3. Salt Lake City

4. Phoenix4. Phoenix

5. San Jose5. San Jose

FortuneFortune, November 23, 1998, November 23, 1998

Top 15 U.S. Cities for Top 15 U.S. Cities for EntrepreneurshipEntrepreneurship

1. Austin1. Austin 9. West Palm Beach9. West Palm Beach

2. Atlanta2. Atlanta 10. Colorado Springs10. Colorado Springs

3. Santa Rosa3. Santa Rosa 11. Fort Collins11. Fort Collins

4. Boulder4. Boulder 12. Oakland12. Oakland**

5. Boise City5. Boise City 12. Seattle12. Seattle**

6. San Diego6. San Diego 14. Charlotte14. Charlotte

7. Orange County7. Orange County 15. Fort Worth15. Fort Worth

8. San Antonio8. San Antonio * tied* tied

Forbes magazine, Vol 165, #13, May 29, 2000, p. 137

The University of Texas at The University of Texas at AustinAustin

Flagship of the University of Texas System Flagship of the University of Texas System 15 academic and health institutions15 academic and health institutions

52,000 Students, including 13,000 52,000 Students, including 13,000 graduate and professional school studentsgraduate and professional school students

Nationally ranked in Engineering, Nationally ranked in Engineering, Computer Science, Business, and LawComputer Science, Business, and Law

Global programs and large numbers of Global programs and large numbers of international studentsinternational students

Located in Austin, TXLocated in Austin, TX

ICIC22 INSTITUTE INSTITUTEThe University of Texas at AustinThe University of Texas at Austin

A “think and do tank” – A “think and do tank” – www.ic2.orgwww.ic2.org

ICIC22 Institute InstituteA A Catalyst Catalyst Organization Organization

Linking Linking

CREATIVITYINNO

VATIO

N

CAPITAL

IC2

WHO WE AREWHO WE ARE

30 years old30 years old

$3.5 million$3.5 million

20 staff20 staff

220 IC² 220 IC² FellowsFellows

2

Research Programs & Research Programs & ConferencesConferences

Masters (MSSTC) ProgramMasters (MSSTC) Program Visiting ScholarsVisiting Scholars Regional DevelopmentRegional Development IncubatorsIncubators Non-degree Education & Non-degree Education &

TrainingTraining ProgramsPrograms PublicationsPublications

What Makes ICWhat Makes IC22 Institute Institute Different?Different?

Dr. George Kozmetsky Dr. George Kozmetsky • Co-founder – TeledyneCo-founder – Teledyne• Dean - UT Austin Business School Dean - UT Austin Business School

(1966-1982)(1966-1982)• Founded ICFounded IC22 in 1977 in 1977• Winner of National MedalWinner of National Medal• of Technology (1993)of Technology (1993)• Educator, Entrepreneur,Educator, Entrepreneur,• Mentor, and VisionaryMentor, and Visionary

The Fellows The Fellows make ICmake IC22 different different

• Academia, Business and

Government • Champions • Entrepreneurs• Emerging Talent• International• Transdisciplinary

Econometrics, Marketing, Business Strategy, Regional Economic Development, Technology Transfer, Commercialization, Chaos Theory, Globally Networked Entrepreneurship, E-Commerce, Management Innovation, Entrepreneurship, Alliance Building

Visiting Scholars make ICVisiting Scholars make IC22 differentdifferent

60 Scholars from Academia, Business and

Government in 13 nations• Korea Telecom• Coruna University, Spain• Tohoku University, Japan• Moscow Science Park “Izmaylovo”• Nizhne Novgorod• Russian Venture Capital Association• Adelaide University, Australia• Instituto Superior Tecnico, Portugal• Many others

Action Programs make ICAction Programs make IC22 different different Austin Technology Incubator (ATI) Austin Technology Incubator (ATI)• 65 companies launched• 10,000 jobs created (2,850

direct, 7,150 indirect)• $1.2 billion in revenue

generated • $500 million+ in VC and other

investments secured• TCN [Thecapitalnetwork.com]

• ATC [Austintechnologycouncil.org]

• Clean Energy Incubator

MS in Science and Technology MS in Science and Technology Commercialization Commercialization makes ICmakes IC22 Different Different

12 MONTHS12 MONTHS AVE. AGE = 37AVE. AGE = 37 FRIDAY/SATURDAY FRIDAY/SATURDAY VIDEOCAST IBM and VIDEOCAST IBM and

Applied Materials Applied Materials MSTC-Monterrey, MexicoMSTC-Monterrey, Mexico IN-CLASS & INTERNET IN-CLASS & INTERNET

Global and Multidisciplinary Global and Multidisciplinary Perspectives Perspectives Makes ICMakes IC22 different different

Memorandum of CooperationMemorandum of Cooperation Research Research Visiting ScholarsVisiting Scholars IC2 Institute Research FellowsIC2 Institute Research Fellows Student Exchange ActivitiesStudent Exchange Activities ConferencesConferences Collaborative ResearchCollaborative Research Other ActivitiesOther Activities

31 Nations

ASIA

China

India

Japan

Korea

Singapore

Vietnam

EASTERN EUROPE

Rep. of Georgia

Russia

Ukraine

Poland

EUROPE

Belgium

France

Germany

Italy

Norway

Portugal

Spain

Sweden

The Netherlands

United Kingdom

LATIN AMERICA

Belize

Brazil

Chile

Colombia

Mexico

MIDEAST

Algeria

Armenia

IsraelOTHER

Australia

Canada

New Zealand