Dr. Harris echoed Mr. Morgenthaler’s comment that “what happened to the Rust Belt cities should not happen to the rest of the U.S. This thought is one of the drivers of the National Academies study of state and regional innovation policy and of leaders throughout the country holding meetings like this. You only have to come here and see how much the population has declined, and then feel the energy and determination of the leadership here that is working to turn this situation around.”
Dr. Harris proposed a thought to start the panel’s conversation: the difficulty experienced by many U.S. businesses in dealing with the academic community. “The university community often says they are easy to deal with,” he said, “but to the average citizen, the universities have a wall around them and it is hard to make contact. I have seen that in Arizona, where I work, and in South Carolina where I also worked, and other places.”
By contrast, he said, he had worked in Ireland where he found the opposite—“an academic community with a hunger to be more successful in working with the business community. The Irish recognized that if academia didn’t find a way to work with industry, it was likely that their industry was going to move to China, or Eastern Europe, where they could find cheaper manufacturing.” While Ireland had major banking and real estate problems, they were still sustained by a serious biotechnology industry, he said, which manufactured nine of the ten top-selling drugs in the world. They also manufactured more software than any other country. “The presidents of the universities, in particular, were willing to try new things to help bolster their manufacturing. They had to try to protect that technology base. And they have done so, by creating friendly approaches to IP and making it easy to contact and work with the faculty.”
Dr. Harris said that his challenge to the next speakers was to suggest ways to break down some of these perceived walls around academia. “If we can, we’re going to find that the capacity to change in this part of the state is enormous. You have talent; it’s a matter of releasing that talent and creating an open pathway to economic success. Many universities have a lot of people who are in the middle of that process, none of them with the right incentives to be successful. You have to develop new models and more effective incentives to break down barriers and do this.”
The world is actually not flat but rather spiky, said Dr. Proenza, who began his presentation with a nighttime satellite view of the United States, and the state of Ohio. “We see none of the traditional geographical boundaries we cling to even though they are no longer functional. We see that Ohio, especially northeast Ohio, is not composed of separate entities. Our population is neatly distributed in a bull’s head pattern, with horns along Lake Erie and the center of gravity at Akron. Economies today are agglomerated into major regions like this. Some extend over great geographical distances, such as from Boston to Philadelphia to Washington. We need to overcome some of those old geographical and political biases we once had.”
The Akron Model
Dr. Proenza said northern Ohio’s current economic climate is improving and although some challenges remain, the region is beginning to grasp and take advantage of many opportunities. The Akron Model is based on three guiding principles: relevance, connectivity, and productivity. First, universities will not survive if they do not become relevant in their communities. Second, universities cannot be isolated as ivory towers, but must be connected with other sectors of the community. And third, to prosper, they have to be more involved in innovation with community partners.
Dr. Proenza also criticized the current method of ranking universities “by their size and by how many people they exclude. This is an inefficient model, and it doesn’t help.” The Akron Model is different, he said, and is based on a desire to be a broad-based and robust platform for economic engagement. At The University of Akron, he said, this engagement is part of everything done in every discipline. The university tries to implement that vision through a number of initiatives.
FIGURE 5 The shape of our regional economy.
SOURCE: Luis Proenza, Presentation at the April 25-26, 2011, National Academies Symposium on “Building the Ohio Innovation Economy.”
“Over the last 12 years, we have undertaken a major renovation of our campus into a new landscape for learning. This has generated great energy, and transformed the facilities for the betterment of the community. For the first time, governmental entities in Akron recognized that the university is a significant asset in the community—not just because we created many construction jobs, but because our ability to attract students, researchers, and others is collectively making an economic impact.”
‘An Island of Beauty Surrounded by a Sea of Decline’
An essential realization was that the neighborhood surrounding the university needed revitalization, and if the university did not take an interest, it would eventually suffer. “We could not build an island of beauty surrounded by a sea of decline,” Dr. Proenza said. The university joined with the Knight Foundation and began a University-Park Alliance to revitalize a 50-block, 1,000-acre area. To date, outcomes include more than $300 million in private-sector investment, some 920 new jobs, 80 new housing units, and 34 acres of new green space.
Dr. Proenza then outlined one of the university’s other major initiatives. “With the support of the Knight Foundation, we joined with three hospitals and a medical school to create the Austen BioInnovation Institute,” he said. “The objective was to bridge the expertise in materials science, particularly in biomaterials, at the University of Akron with the orthopedic and woundhealing skills at the hospitals. The goal of this $100 million partnership is to establish Akron as the world’s leading biomaterials and orthopedic research program within 10 years.”
Other initiatives include an Innovation Alliance, in partnership with two community colleges. Also, with the National Inventors Hall of Fame, the university has helped form a STEM high school. And in conjunction with the National Association of Corrosion Engineers and the Department of Defense, it has created the first BS program in corrosion engineering, forming research partnerships with half a dozen other universities. Finally, the university is forming a Regional Innovation Alliance to better support all these activities.
A ‘Broad-based, Robust Platform’
The core of these programs, Dr. Proenza said, is the University of Akron Research Foundation (UARF). “We see it as a boundary-spanning organization,” he said, noting further that its central attribute of community involvement distinguishes it from other institutions that have adopted the Bayh-Dole model, but focus primarily on traditional licensing and commercialization. Instead, he repeated, the UARF is a “broad-based, robust platform for economic development.”
Dr. Proenza said the foundation began by taking inventory of regional assets left over from the Rust Belt era and began to assemble them in ways that could be more productive. Technical libraries were donated by companies to the university; “we manage them, which saves the industry a lot of money, and we have access to much broader set of resources.” Similarly, they found space and equipment that was being underutilized. The UARF inventoried the university’s robust patent portfolio to make it more productive; as a result, the university has typically ranked first, second or third nationally on patents issued per million dollars of research input and also in companies formed per million dollars. The university also joined with companies to develop non-core technologies. They began, in cooperation with the companies, to commercialize the IP, license it, or create new companies. The UARF has formed more than 46 companies in the last six years, 23 from University of Akron technology and the balance in cooperation with industries.
The University of Akron Research Foundation also entered into a series of partnerships for research and technologies developed with companies, including Fortune 500 firms that needed new insights into their core areas. It also helped form a series of networks to stimulate the entrepreneurial climate, including an Archangel Network, a women’s Archangel Network, and more recently, with the help of many partners, a student-based venture network. It has
partnered with Lorain County Community College and others to make grants to small companies that also become educational opportunities for students. The Foundation formed a series of for-profit and not-for-profit companies to support this activity; it also offers services to others, helping with technology commercialization by other colleges and universities. Dr. Proenza said that because others are sometimes reluctant to say they are contracting with the University of Akron Research Foundation, the foundation is evolving into the Ohio Research Foundation so as to be “place-neutral.”
These activities have attracted awards and recognition from a variety of organizations, including the Ohio Board of Regents, Innovation Associates, the University Economic Development Association, Milken Institute, and the Economic Development Administration, which awarded The University of Akron one of its six i6 Challenge Awards, in partnership with the Austen BioInnovation Institute. “We think this recognition is because the model frames the university in a new way—not as an ivory tower, but as a platform across all of its disciplines, with potential opportunities to engage with the community.”
Lessons the University has Learned
Among the lessons the university has learned, Dr. Proenza said, are the following:
- Transform “weak” assets into strengths;
- Utilize the “guerilla” entrepreneurial talent of experienced people who have retired or been displaced;
- Identify and form unlikely partnerships that experience unexpected synergies;
- Involve the city and community as integral partners who become allies and advocates;
- Coordinate closely with economic development entities, such as NorTech, Jumpstart and BioEnterprise;
- Expand the university offerings and tool chest into a broader base to focus on relevance, connectivity, and productivity;
- Recognize and resolve:
- Conflict of egos when participants compete for credit;
- Partnering paranoia;
- Relationship fatigue.
“You have to be committed to relinquishing short-term control to gain long-term leverage,” Dr. Proenza said.
Finally, universities have to become vigorous “silo busters” to fully engage outreach and partnerships. He said that his university “just happens to own the quintessential example of silo busting, the old Quaker Square silo
FIGURE 6 Silo busting.
SOURCE: Luis Proenza, Presentation at the April 25-26, 2011, National Academies Symposium on “Building the Ohio Innovation Economy.”
facility. We have literally broken through the silos while renovating the complex into a functional modern building.”
Dr. Proenza concluded by proposing a new role for the university of the 21st century. It must be:
- A convener.
- A developer.
- An anchor institution for clusters of innovation.
“The universities now face common challenges and unique opportunities. The University of Akron is building a bridge to the future through innovative approaches, and that depends on partnerships with visionaries and innovators.”
Dr. Baeslack suggested the “fundamental premise” that the primary driver of the future economy and job creation “will be innovation largely led by science, discovery and engineering.” Global economic competitiveness, he went on, requires the confluence of scientific discovery, which creates knowledge and leads to technological opportunity, with work force talent and an enabling environment. “Put all that together, and you have the ingredients for economic success, as the second National Academies Gathering Storm report described.”16
Modern universities contribute to all these components, he said. Over the past decade, northeast Ohio has embraced this concept, as does Case Western Reserve University (CWRU) and its partners. “Certainly there must be a strong partnership among sectors, and a willingness to work together.”
Like other major comprehensive research universities around the country, he said, Case Western Reserve has a broad base of activities that contribute to the U.S. economy. Universities nationwide received about 3,300 patents in 2009, and accounted for more than $40 billion in salaries and 270,000 jobs added annually to the U.S. economy. More than 500 companies form annually around university discoveries, leading to important products and inventions, such as Google and the drug Rituxan, developed from the work of Case Western Reserve scientists.
A Focus on the Priorities
CWRU’s approach to economic development, Dr. Baeslack said, is consistent with ingredients described by the National Academies. A key is its institutional strategic focus and prioritization. “We are large; we educate thousands of talented students annually in disciplines tied to growth sector opportunities. That said, we can’t be everything to everyone. We have decided we must focus on where we are: health, advanced materials, and energy are our three priority areas. With our expertise there, we can align strongly with the technological community and needs in this region.”
Another aspect of its mission is educating the leaders of tomorrow with an innovation and entrepreneurial mindset, he said. Case Western Reserve University has a base of about 10,000 undergraduate and graduate students, with nationally ranked programs in medicine, engineering, and business. It devoted more than $385 million to research in 2009-2010, primarily in the form of grants
16Members of the 2005 “Rising Above the Gathering Storm” Committee, Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5, op. cit.
from the Federal government. Many of its professional degree programs are interdisciplinary, coupled with training at premier health care and corporate partner sites, including Great Lakes Energy Institute, Advanced Materials Institute, and the schools of medicine, business, engineering, and law. The Innovation Alliance Program teams students and faculty to learn about entrepreneurial and experiential learning, including innovation and commercialization of products.
From such interdisciplinary activities, for example, more than 20 active life science companies have been spun off in the past decade, said Dr. Baeslack. The NSF Center for Layered Polymer Systems, or CLPS, is one of 17 NSF Science and Technology Centers. It has received more than $10 million over its first five years, and has been renewed for five more years. The program, led by CWRU, partners with the Office of Naval Research and University of Texas at Austin. The program uses techniques of extrusion to develop very fine layers of polymers with different structures that create useful new materials for aerospace, electronics, biomedical, and other applications. This has led to the spinoff of Polymer Plus LLC, which works with faculty to translate their basic research. “The reason we were renewed,” he said, “is because we are transforming the research into viable technologies and products. This is a great example of a major investment by the Federal government that has seen effective commercialization of research.”
Another activity that supports entrepreneurial and commercial activities is the Swagelok Center for Surface Analysis of Materials. This is a multi-user analytical facility providing access to a wide range of materials and surface characterization techniques for both academic and industrial clients. It is also home to a myriad of northeast Ohio clients, enabling commercial access to cutting-edge technical infrastructure.
Collaboration between the CWRU Medical School and its clinical partners has led to the formation of 20 active life-science companies. The medical school also supports regional firms that have imported biotech opportunities to northeast Ohio. Areas of particular activity include biomedical imaging, cellular therapies, and neural engineering. The school is now developing a cluster of small companies in these areas.
Entrepreneurial Support for Faculty
In tandem with the R&D effort are a program of “enabling resources,” led by more than 40 professionals who expand and capitalize on the research activities, and the technology transfer office. The tech transfer office supports faculty and links them not only with the community and with corporations, but also with regional organizations, foundations, and governments that provide technology resources.
“This is the key,” said Dr. Braeslak. “From a faculty standpoint, it takes that whole team to bring enough support to the faculty. When we hire new faculty, we find they are entrepreneurial. They no longer just want to write
grants and publish papers—they’re interested in patenting, even starting businesses. That’s what we’re trying to support.” The tech transfer office now ranks in the top 20 in its national peer group in company creation, revenue, invention disclosures, licenses and options, revenue, and cumulative licenses. It also manages the university’s pre-seed fund, Case Tech Ventures, which since 2003 has provided first capital to eight regional technology startups.
He summarized some of the successes in innovation and commercialization, including: A stable of more than 20 for-profit companies active in the region; more than 200 active licenses with industry; novel multiparty collaborations in advanced energy, clinical translation and imaging; and many “first-in-man” clinical interventions based on CWRU technologies and executed by spinoffs and clinical partners.
Among continuing challenges he cited the increasing global competition, the complexity of value creation and economic growth, and the difficulty of anticipating new trends. “As an administrator of a university,” he said, “you’re trying to project how much new investment you’ll need to enable this process and support this infrastructure. It’s difficult to predict, yet we have to make that investment.”
Aligning Faculty Rewards with Entrepreneurial Goals
Dr. Baeslack added that the university support and reward system for faculty is still poorly aligned with entrepreneurial goals. “We are hiring more faculty who come out of environments and grad school experiences where they had advisors who didn’t just do research, but were interested in transferring it into commercial products. We need to encourage more of that, and in some cases to clarify and revise the tenure reward process. We need to recognize not just writing a paper and getting a grant but developing intellectual property and ultimately products.”
Finally, Dr. Baeslack said, universities, as key partners in innovation systems, must be more efficient and flexible in supporting the innovation enterprise. “Universities can tend to be insular,” he concluded. “We’re doing self-study on how we can be more user-friendly and to take a less rigid approach to IP.”
Tony Dennis of BioOhio said that many universities were adding entrepreneurial training as either graduate or post-graduate programs. He asked whether students should be exposed to this world earlier. Dr. Proenza agreed enthusiastically, citing the University of Akron’s program with The National Inventors’ Hall of Fame, which works with high school students. The university also has an undergraduate program for entrepreneurism across the curriculum so that students begin to understand not only how new knowledge is created, but also how it is used. He cited a close linkage between the colleges of business,
engineering, and science, as well as an IP program that offers young people more knowledge about how to navigate these environments.
Dr. Baeslack said that one could certainly learn something about innovation and entrepreneurship in the classroom, but that young students might gain even more by spending a few weeks, a summer, or a semester with a startup company. “That’s how they really get excited, when they work in the real world.”
Mr. Morgenthaler asked the panel’s response to a comment by an earlier president of Case Western Reserve that “commercialization and technology transfer should only come through the minds of our graduates.” He asked why universities in the past had not been more commercialization minded. Dr. Proenza suggested three points. The first, he said, was historical. American universities had engaged with commercial enterprises in agriculture and the mechanical arts since 1862, when the Morill Land Grant Colleges Act set up the mechanism. It took another century for universities to do that for other areas. Second, most university presidents as late as 1990 disapproved of working with industry in any way. Third, only recently have people come to see that being strategic partners with industry can be in universities’—as well as the country’s—interest.
Universities’ Responsibility to the Community
Dr. Baeslack said he agreed with those three points, and added that public universities had more sense of responsibility to serve the community than many private universities. At private universities, he said, many faculty members have learned that their role is to do research, make discoveries, and publish results. “It comes back to the reward system, how strongly it defines the culture, and how difficult it is to change.” In recent years, he noted, it has changed at some private universities, notably MIT and Stanford. “I think that the importance of strategic partnerships with industry and the community is driving changes in the reward system and the expectations placed on faculty. But it’s been slow in coming. My goal is to see that accelerate much more rapidly.”
A questioner asked about the extent to which major research universities collaborate on issues of economic development. Dr. Proenza said there was a great deal more collaboration than may be apparent from the “outside.” In defined areas of expertise, such as in polymer science, were longstanding partnerships, and “we are increasingly seeing other opportunities.”
Dr. Harris pursued the question of collaboration, asking if there were any advantage to greater cooperation on IP issues, perhaps by bringing legal staffs together or creating a single point of contact. Dr. Proenza said that the greatest benefit might be in gaining contacts outside one’s area of expertise. Dr. Braeslak agreed that universities do collaborate widely, certainly in materials sciences, health sciences, cancer research, and energy. With the growing emphasis on interdisciplinary research, different universities can bring different strengths, and help in searching for third-party funding and partnerships.
Dr. Singerman asked which activities or policies of Federal funders either hinder or help commercialization activities. Dr. Proenza noted that certain tax policies, such as how tax-exempt facilities can be used, were too restrictive and that it was time to make the R&D tax credit for industry permanent. He added that the mutual finger-pointing by universities and industries over technology transfer issues should stop.
“Of course there are cultural differences, but there are no data to suggest that industry does any better at commercializing technologies than academia,” Dr. Proenza said. There’s plenty of non-core but useful technology sitting on shelves; we can actually help some industries use it if they take the time to talk with us.”