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Collaboration between Academia and Industry in the US and in Austria -

How TIP, STTR, and COMET Help to Bring Ideas to Market

bridges vol. 26, July 2010 / Feature Articles


By Klaus Puchbauer-Schnabel

In a globalized world, research, development and technological innovation have become key factors in the long-term competitiveness of any country. Their direct and indirect effects on economic growth, employment and, ultimately, the prosperity of a country and its citizens are essential for increasingly knowledge-based societies. Universities play a key in the field of technological progress and knowledge creation. However, it is important that the knowledge produced in academia doesn't sit on the shelf but is used and transformed into products and applications that will enter the marketplace.

The political agendas in the US and Europe seek to stimulate collaboration between universities and industry to foster technology transfer. The results of collaborations between private industry and academia include obtaining R&D expertise, accelerating entry into the marketplace, stimulating creative thinking, and encouraging future collaborations.
Two major public R&D funding programs in the US for public-private partnerships (PPP) are the Technology Innovation Program (TIP) and the Small Business Technology Transfer Program (STTR). In Austria, COMET , a program for technology transfer and cooperative research between industry and academia, plays a similarly important role. This article compares the different programs and their approaches to technology transfer

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Technology transfer in the United States


Since the University and Small Business Patent Procedures Act - commonly referred to as the Bayh-Dole Act and enacted by the US Congress in December 1980 - US universities, small businesses, and nonprofits operating with Federal funds have been given intellectual property control of their government-funded inventions for further development and commercialization. The contracting universities and businesses are permitted to exclusively license the inventions to other parties. However, the Federal government continues to hold a so-called "march-in" right to license the invention to a third party, without the compliance of the patent holder or the original licensee.
In testimony before Congress during a March 24, 2010, hearing on how to support innovation in the 21st century, Mark Kamlet, provost and executive vice president at Carnegie Mellon University, stated that the act has boosted the university community's commitment to technology transfer. According to Kamlet, the number of university tech transfer programs has increased from 30 to over 300 as a result of the enactment of the Bayh-Dole Act. Over 5000 new companies have been created, and university-based patents and product introductions have also risen drastically. A first review of the Bayh-Dole Act by the House Science and Technology Committee's Subcommittee on Research and Science Education is planned for 2010.

According to the US Small Business Administration (SBA), 14.5 million or 64 percent of all new net jobs were created by small businesses between 1993 and 2008; this equals more than 2,600 jobs per day. Impressively, small businesses employ nearly 40 percent of the US science and engineering workforce, while creating 13 times more patents per employee than large firms. In addition, they generate more than half the US GDP and export an average of $375 billion per year.

To support, promote, and accelerate innovation at small businesses in the US, the Technology Innovation Program (TIP) was created in 2007.


The Technology Innovation Program

TIP was authorized by the America COMPETES Act of 2007 and is managed by the National Institute for Standards and Technology (NIST). TIP was designed for

"... the purpose of assisting U.S. businesses and institutions of higher education or other organizations, such as national laboratories and nonprofit research institutions, to support, promote, and accelerate innovation in the United States through high-risk, high-reward research in areas of critical national need."
 
  • Eligibility

TIP funding focuses on early-stage high-risk, high-reward R&D projects. TIP supports small and medium-sized businesses only, although large companies are allowed to participate in a TIP joint venture as an unfunded partner. Businesses eligible for grants are not registered on the Fortune 1000 list, and have annual revenues of $1.27 billion or less. Furthermore, a funded company must be incorpor ated in the US and do the majority of its business in the US.

The structure of TIP encourages universities to fully participate in the program; universities can lead a joint venture that includes at least one small or medium-sized for-profit. Most importantly, a university can participate as a contractor within a TIP award. Any intellectual property rights (IPRs) created through TIP funding for single company awards are pursuant to the Bayh-Dole Act. For joint ventures, IPRs may be conveyed to any member of the joint venture as agreed to by its participants.

  • Budget

TIP projects are public-private partnerships. The program provides cost-shared awards of up to 50 percent of direct project costs. Indirect costs such as overhead costs or management fees are excluded. TIP may fund participating companies with up to $3 million over three years, whereas the limit for a joint venture is $9 million for up to five years. The Federal funding for TIP in FY2010 was $69.9 million, including management of ongoing awards. Approximately $25 million will be spent on new TIP awards. Out of 138 applicants, 20 awards were granted in 2009.
Since all projects are cost-shared, both the R&D performers and the Federal government have an incentive to succeed, and both have an incentive to terminate projects that are not working out as planned.

  • Critical national needs

The areas of critical national needs

 "... need government attention because the magnitude of the problem is large and societal challenges are not being sufficiently addressed."


These areas include civil infrastructure and manufacturing. The national need and interest areas that TIP has identified to date are energy, healthcare, advanced robotics, green chemistry, and networks.

A societal challenge represents a technical problem whose solutions necessarily involve a multitude of research disciplines. TIP supports development of cutting-edge technologies by the private sector and universities to address those critical national

tip_small.jpg
Acellent Technologies, Inc.: Real-time assessment of structural stability and impending collapse of bridges. TIP-funded project. 

needs and key societal challenges. The selection of topics for areas of critical national need is based on input from the TIP Advisory Board, from within NIST, and from the public.

For example, the first TIP competition focused on "Advanced Sensors to Support Monitoring and Assessment of Civil Infrastructure," such as water pipelines, roads, bridges, and tunnels. The active open call for 2010 requests topics is in the area of "Manufacturing and Biomanufacturing: Materials Advances and Critical Processes." Those advanced materials are nanomaterials, superalloys, alloys & smart materials, composites, ceramics, and glasses.

Just as with TIP, the Small Business Innovation Research Program SBIR and the Small Business Technology Transfer Program STTR provide early-stage financing, but with a broader approach and wider target group of eligible companies. The SBIR/STTR follows a bottom-up approach and is thematically open within participating Federal US departments and agencies.


SBIR/STTR

The following US Federal departments and agencies are currently participating in SBIR/STTR:

SBIR and STTR provide pre-seed and seed financing to small businesses. The program is designed to support scientific excellence and technological innovation through Federal research funding. Participating Federal agencies with extramural research budgets over $100 million must set aside 2.5 percent of their research budget for SBIR.  Federal agencies with extramural R&D budgets exceeding $1 billion also participate in STTR; originally created in 1992, STTR requires an additional set-aside percentage of 0.3 percent of the respective research budget. STTR's goal is to stimulate cooperative R&D and technology transfer between small businesses and nonprofit organizations such as universities and federally funded R&D centers.

Defense electronics engineering systems: WaveBand Corporation received STTR grants for developing a 35 GHz Millimeter Wave Antenna.

Currently, DOD, NSF, DOE, NASA, HHS, and DHS (since FY2006) participate in STTR. From FY1994 to FY2006, STTR awarded $1.3 billion to about 6,000 projects, including $226 million for 878 projects in FY2006.

  • Eligibility

The Small Business Administration (SBA) coordinates STTR. As STTR requires research institution partners, the partner share must be at least 30 percent but not exceed 60 percent, whereas the award always goes to small businesses. Eligible applicants for STTR are small businesses located in the US, which are organized for profit and have no more than 500 employees. The business has to be at least 51 percent US-owned and controlled (individuals), and the principal investigator's primary employment can be with the small business or research institution.
Small businesses willing to participate in the STTR program must team up with research institutions and develop a working agreement before competing for an STTR award. Universities play an important role as STTR partners: In FY2004 at least 200 universities, many with multiple awardees, cooperated with small companies under STTR.

  • Phases in SBIR/STTR

The SBIR/STTR Program is designed in three phases, with only phases 1 and 2 eligible for STTR funding.  Small and medium enterprises (SMEs) eligible for the SBIR/STTR program begin the following three-phase program:

·    Phase I is the startup phase. Awards of up to $150,000 for nine months fund the exploration of the scientific, technical, and commercial feasibility of an idea or technology.
·     Phase II awards of up to $1,000,000 for as long as two years expand Phase I results. During this period, the R&D work is performed and the developer begins to consider commercial potential. Only Phase I award winners are considered for Phase II.
·    Phase III is the commercialization stage, when the innovation moves from the laboratory into the marketplace. No STTR funds support this phase. The small business must find funding in the private sector or other non-STTR Federal agency funding.
Click here for a SBIR/STTR SHOWCASE
"Language Weaver"  

According to the Office of Science and Technology Policy, 39 percent of SBIR/STTR projects have resulted in commercial sales. Moreover, award recipients attract investors like Venture Capitalists, Business Angels, or other sources of funding as awards are seen as a seal of quality - a step toward bridging the "valley of death" in the critical phase of bringing ideas to the market.


Technology Transfer in Austria: COMET

To foster collaboration between academia and industry, the so-called Competence Center Program was started in 1998. After the success of the initial program, a successor program called COMET was launched in 2007.

COMET is a joint program developed by the Federal Ministry of Transport, Innovation and Technology (BMVIT) and the Federal Ministry of Economy, Family and Youth (BMWFJ), and is managed by the Austrian Research Promotion Agency (FFG).

COMET consists of three program lines, the K1-Centers, K2-Centers, and K-Projects, and is thematically open. The main strategic objectives of COMET are an orientation towards excellence, involvement of international research expertise, and development of technological leadership in order to strengthen Austria as a R&D location.

The three program lines of COMET
K-Projects K1-Centers   K2-Centers 
Number: approx. 20
Public financing: 40-50%
Project duration: 3-5 years
Funding: $65 million

Number: approx. 15
Public financing: 40-55%
Project duration: 7 years
Funding: $155 million
Number: approx. 5
Public financing: 45-60%
Project duration: 10 years
Funding: $225 million


 

  • Budget

The overall Federal funding for COMET is €450 million (~570 USD) for the period 2008-2018. Federal public funding made available for the first and second calls for proposals has been €125 million  (~160 USD) each.

  • Eligibility

University-industry cooperations with a relevant research program are eligible for COMET.

Additional general criteria for eligibility are:

·    High quality of collaboration between the research partners
·    Managing and initiating new scientific and technological developments and preparing their implementation.
·   Achieving international visibility through excellent research, as well as by integrating researchers and companies of international renown.

Additional criteria for the more developed K1- and K2-Centers are

·    Human Resources development
·    International integration.

According to an evaluation, once a K-Center is established it attracts outstanding researchers, who support the transfer of expertise to industry.

  • Application evaluation

Applications for affiliation with one of the K-Centers research programs are assessed by an independent panel of experts consisting of members of the following organizations: Austrian Promotion Agency (FFG), Austrian Science Fund (FWF), Christian Doppler Research Association (CDG), and international researchers nominated by these agencies. After the initial affiliation, the funded centers are evaluated several times during their funding period.

COMET has turned out to be one of the most successful technology policy initiatives in Austria and is internationally recognized as a best practice model. It demonstrates how university-industry collaborations can contribute to speeding up the process of commercialization of ideas by directly addressing both public and private sectors.

K2 Mobility - Computational fluid dynamics simulation in engine compartments.   


A showcase for a K2-Center is the "K2 MOBILITY Sustainable Vehicle Technologies" located in Graz/Austria. The center has positioned itself as an international platform for research and development in the automotive industry. It addresses the gap between academic research and

Click here for a COMET  
SHOWCASE K2 MOBILITY Sustainable Vehicle Technology

the needs of industrial R&D departments. The cooperation network comprises over 45 international industry partners and software vendors (e.g., Audi, AVL, BMW, MAN, MAGNA Steyr, Porsche, Siemens) and more than 35 university institutes worldwide (e.g., Catholic University Leuven (Belgium), Royal Institute of Technology (Sweden), Illinois State University/ACRC (USA), Concordia University (Canada)).


Conclusion

The US and European innovation policies aim at maximizing the public use of and benefit from university-industry collaborations. The success of the Bayh-Dole Act, which has boosted the number of profitable university tech transfer programs in the US, put pressure on Europe to seek similar mechanisms to deal with IPR.

Comparison of the three programs discussed above:

Technology Innovation Program (TIP) SBIR/STTR   COMET
Year of program launch  2007  1982 2007
Mission, technical scope Focus on research problems with critical national need; white papers determine research area. Stimulate economic growth and accelerate commercialization of technologies Small businesses can apply at participating departments like DOD, NSF, DOE, NASA, and HHS; thematically open
University-industry cooperations with cutting-edge research program. Stimulate economic growth and accelerate commercialization of technologies
Budget $70 million in FY2010 Over $2 billion/year $125 million per call;
$450 million from
2008 to 2018
Who leads?  Small business Small business/research institute   Leaders of consortium are mostly university institutes, but also SME



According to the US and European scientific community, a number of issues still need to be tackled, such as improving the IPR-licensing process, which is currently very complicated and expensive, or additional measures to help SMEs during the commercialization phase, which is still a major challenge for young companies to face. Also, some are critical of the fact that the mere establishment of tech transfer offices at universities hasn't always been successful. Universities should be encouraged to more effectively manage their technology transfer offices to generate profits for the university and diffuse technology and innovation outside of the community.

Bringing innovative ideas successfully to the market is a major challenge - on both sides of the Atlantic. While TIP, SBIR/STTR, and COMET clearly share a common goal of supporting companies or joint ventures and their projects through to the product development phase, their chosen approaches differ: University institutes and companies funded by TIP or SBIR/STTR have to find private financial support by teaming up with Venture Capitalists or Business Angels. COMET, on the other hand, tries to support this process by creating physical centers where employees of funded companies and university institutes can cooperate. Each of the approaches described has been found successful as a means to bridge the "valley of death" between the creation of an idea and the development of a product, and to bring together academia and industry to work on the process of product and services innovation.

***

Klaus Puchbauer-Schnabel is staff member of the Department of Research and Technology at the Austrian Federal Ministry of Economy, Youth and Family. {/access}

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