Commercialization Forum The Role of Universities July 23, 2007

1. Commercialization Forum The Role of Universities July 23, 2007

2. Innovation, Higher Education, andthe Competitiveness of RegionalEconomies Prof. Richard K. Lester Industrial Performance Center Massachusetts Institute of Technology

3. Focus on Universities as “Engines” of Local Economic Development

4. Universities should embrace their role • as actors in their local economies. • The conventional view of this role is • too narrow. • A ‘one-size-fits-all’ approach to • economic development is common • but not wise. • Universities need to approach • economic development strategically.

5. Four pathways of regional • innovation-led growth • Indigenous creation of new industry • Transplantation of new industry into region • III. Diversification of existing industry into new • IV. Upgrading of existing industry

6. South Dakota State University An Economic Development Invention Engine David L. Chicoine, President South Dakota State University Science & Tech Econ Development Mission: To broaden and strengthen the development of the SD and US economies through the effective management, transfer and commercialization of research derived technologies and intellectual properties, supporting the creation of jobs, careers, businesses, and wealth, while fostering the continuous advancement of the University’s premier education and research programs.

7. Multiple University Rolesin the Local Economy • Forming/accessing networks and stimulating discussion of industry development pathways • Influencing the direction of search processes • Meetings and conferences • Hosting standard-setting forums • Entrepreneurship centers & mentoring programs • Alumni networks • Personnel exchanges (internships, faculty exchanges, etc.) • Industrial liaison programs • Visiting committees • Curriculum development committees • Creating the built environment to support this • Undergraduates • Graduates • Mid-career • Executive Educating People Providing Public Space Problem- solving for Industry Creating Codifiable Knowledge • Contract research • Cooperative research with industry • Technology licensing • Faculty consulting • Providing access to specialized instrumentation and equipment • Incubation services • Publications • Patents • Prototypes Prof Richard K. Lester, MIT Local Innovation System project 12-13-05

8. Conditions for Technology-Based Economic Growth • A large, high-quality research base/world-class science • Effective technology transfer and commercialization • Fields of research matched with the needs and opportunities of the regional economy • A commercial sector with scale, network connectivity, and entrepreneurial attributes • Experienced start-up managerial talent • Right-staged investment capital (early-stage) • Mid-sized & large corporations for partnerships • Flow of highly skilled, talented people • Committed and supportive civic organizations (civic entrepreneurs) • Aggressive, targeted, long-term enabling, local and State government policies and programs • Interesting, vibrant communities

9. Pathway from Discovery to Technology Commercialization Faculty Research Discovery Technology Management Office Protect – Market - License Research Parks Incubators Established Companies Faculty Inventors High-TechEconomicDevelopment Patent Applications Licenses Executed Research Discovery Invention Disclosures Start-up Companies • Research: Foundation of Tech. Commercialization • Faculty and students • Funding for research • Facilities for research Start-Up Services & Early Stage Capital

10. InnovationCampus

11. Proposed University Center Science & Technology ParkGEAR CenterSioux Falls, SD

12. Pathways from the Lab to the Market UNIVERSITY RESEARCH HAS TWO COMMERCIAL PATHS University IP Based or Significant University $ Interest LICENSE FOR ROYALTY University Economic Benefit Probable, Economic Benefit Varies NEGOTIATE LICENSE UNIVERSITY RESEARCH IP IDENTIFICATION & DEVELOPMENT TECHNOLOGY DEVELOPMENT THE GAP START-UP EARLY VENTURE MATURE VENTURE University IP Based or Significant University $ Interest VENTURE DEVELOPMENT PROCESS University Economic Benefit Likely, Economic Benefit Varies VENTURE DEVELOPMENT PROCESS REQUIRES BRIDGING THE GAP

13. University Technology Transfer Productivity $2.4M/per disclosure 105,378 Disclosures $257 B Research 49% 51,893 Patent Applications 20% Assessment 52% 26% 27,078 21,151 Active Agreements products Commercialization 2.8% 14% 2,981 Start-Ups platforms AUTM Licensing Surveys FY95- FY04

14. Commercialization Gap Exists Between Research and Products UNIVERSITY RESEARCH TECHNOLOGY DEVELOPMENT EARLY VENTURE DEVELOPMENT MATURE VENTURE DEVELOPMENT STAGE THE GAP

15. Start-Up Projects Investment Model Evaluation Formation Development • Start-Up Services, Inc. Evaluate Projects • Commercial Merit • Management • Nature of market, financial model • Nature and state of technology • Begin licensing discussion with/Tech Management Office Development is “staged” to drive value • Tech Management Office • Initial screen • Patent investment • Start-Up Services, Inc. Launch Projects • Sign the license for the technology • Management • Strategic and financial plan • Product development • Market validation • Seed capital Start-up projects seek early-stage commercial capital Research Discovery

16. Progress in South Dakota • Rural Technologies, Inc. (RTI) –Advanced technologies for animal health (monoclonals, testing, animal research models) • PhotoBioMed Corp. –Strong and safe medical adhesives • Chronix Biomedical, Inc. – Medical diagnostic technologies for early diagnosis of chronic illnesses and infectious diseases (San Jose, CA company located R & D in Brookings) • American Science & Technology (AST) – Chicago firm with R & D in Brookings working on Micro-Electrical-Mechanical systems (MEMES) based sensors for machine parts under DoD contract