The Benefits of Partnering with US Universities in the Era of Open Innovation

By: Melba Kurman

Today’s University is a rich resource for companies seeking game-changing technological breakthroughs. In this in-depth article Melba Kurman looks at the benefits of open innovation partnerships between companies and American university researchers.

In 2009, according to data from the Association of University Technology Managers (AUTM), companies sponsored over $4 billion worth of university research in the United States.  Universities, rather than industrial labs, conduct the majority of federally-funded research in cutting-edge fields such as biotech, clean energy, and nanotechnology, often giving them a clear lead in the race to create ground breaking new initiatives in these fields and at the same time making them high-value open innovation partners.  Some corporate innovation managers are surprised to discover that U.S. universities own large and diverse patent portfolios that originate from the cutting-edge scientific research that goes on in university research labs.  Today, universities own nearly one-quarter of new U.S. patents on the fields of nanotechnology and biotechnology.¹ How do you tap into university know-how?

Tapping into American university know-how

U.S. universities own large and diverse patent portfolios that originate from the cutting-edge scientific research that goes on in university research labs.

In contrast to the lingering stereotype of the academic ivory tower, U.S. universities are well-funded research hubs that create game-changing knowledge across a broad range of industries. Research universities have emerged as a rich source of innovative technologies, specialized expertise, potential new hires and research partnerships.

Today’s universities continue to conduct their traditional functions of teaching and research, but over the past few decades, they have become both innovation explorers (conducting basic research for someone else to develop) and innovation merchants (licensing patents that come from on-campus research).

Both large and small companies are exploring innovation partnerships with university researchers to feed company product development pipelines.   A number of different factors encourage companies to consider an innovation partnership, possibly an open innovation partnership, with a university.

• By partnering with university research labs, companies can explore new technologies and methods without investing in new employees or physical infrastructure.
• University faculty represent a wide range of expertise in a number of different fields; most engineering faculty are actively engaged in addressing leading industry problems in their fields.
• A company can tap into a number of different university research areas, enabling greater agility in company product research efforts.
• If a company hires students for a project, the company builds a pool of potential future employees who are already familiar with the company’s technology and readily available for hire in the short term
• Since university researchers openly share their scientific work, the majority of their prior research projects are publicly available; a company seeking a subject specialist can more easily find and evaluate the offered expertise of the university researcher.
• University research labs are unlikely to attempt to develop a directly competing product.

Companies can tap into university innovation via a number of formal and informal channels.  Partnership options range from hiring student employees, seeking expert technical advice, to licensing university-owned patents.

Given the complexity of the university innovation ecosystem, there’s no “one-size-fits-all” guidebook to help an innovation manager successfully navigate the academic labyrinth.   An innovation manager must carefully consider which channel works best for her goals.

The challenges of innovation with universities

Given the complexity of the university innovation ecosystem, there’s no “one-size-fits-all” guidebook to help an innovation manager successfully navigate the academic labyrinth.

Despite the potential benefits, partnerships between universities and businesses can be complicated by ownership issues of intellectual property rights, misaligned expectations, and differing culture and priorities.

Companies should approach potential university collaboration with appropriate expectations and the awareness that there’s no single correct way to structure a university partnership.  Companies that attempt to collaborate with university researchers frequently discover that in addition to traditional challenges such as cultural differences and varying priorities, companies must also consider intellectual property issues.  It’s important for CEOs, senior executives, product managers and innovation managers to understand that many U.S. research universities view their research labs and faculty expertise as marketable resources.

The most productive partnerships between companies and universities take shape when the all players find the right balance between their core product development goals, organizational values, priorities, and technical and business competencies.   In addition to foundational questions on project purpose and compatibility, other factors an innovation manager should consider when forming innovation partnerships with a university are:

• the industry her company is competing in
• the nature of the knowledge or resource the company hopes to obtain from the university
• the maturity of the product or service that the university will be able to add value to
• the length and potential flexibility of the product development timeline
• how much control the company wants over the research process
• whether the company prefers secrecy around the project, or is comfortable if the university researcher publishes the results
• whether the company’s intellectual property strategies are aligned with the university’s
• project budget

This article offers practical guidance for innovation managers, product managers and executives who are considering making university technical resources part of their open innovation product development strategy. This article focuses on the innovation ecosystem in the United States but many of the dynamics described may be recognized by innovation managers worldwide.

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