Turning Research into Inventions and Jobs

To create jobs and spur innovation we need to make it easier for scientists to build businesses that market their breakthroughs in the lab

By Vivek Wadhwa and Robert E. Litan

A recent BusinessWeek article called for the investment of billions of dollars more in "basic research" to create millions of new jobs. It's hard to argue against the importance of scientific research.

But too often overlooked in discussions over research spending is a fundamental fact: We've already got an abundance of research. The next transistor, semiconductor, or breakthrough in MRI technology may already have been discovered.

The problem is, we've dropped the ball on translating this science into invention. The vast majority of great research is languishing in filing cabinets, unable to be harnessed by the entrepreneurs and scientist-businesspeople who can set it free. We consider this shortfall academia's equivalent of Alaska's "bridge to nowhere."

Let's Nurture Science Startups

If the federal government and academia could improve how well technology is commercialized, we could quickly create millions of science jobs. And those jobs wouldn't be reserved just for PhD researchers; they would go to employees of science-based startups. This would provide a far swifter economic boost for the U.S. in terms of actual new goods and services on the market. Rather than wait decades for the new basic science to trickle out of the Ivory Tower and into products, a mechanism to quickly assess inventions and build associated companies with real potential would show real returns and major job growth within as little as one or two years.

It's not just recently launched startups and their investors who would benefit. Ultimately, this focus on tech commercialization and company formation would also generate more royalty dollars for universities and, in turn, more money for the basic science they so want to expand.

Before we can help scientists make businesses from breakthroughs, we need to understand how broken the current system is. For starters, many universities are underequipped for the monumental task of licensing technology. Major universities have broad research complexes, ranging from anaerobic chemistry to zoology. But too often, when a scientist makes a discovery, the responsibility for finding the right partners to license the technology lies with a single office.

The Art of Technology Transfer

Even a good-size technology transfer office would struggle to master this task effectively, much less provide sufficient industry-specific contacts for proper marketing of discoveries. When university technology licensing offices try to find an investor or licensee for a specific piece of technology, they lack the inventor's insight into the technology's potential. The upshot? According to the National Academy of Sciences, roughly 0.1% of all funded basic science research results in a commercial venture.

Another hindrance to commercialization of science: Very few scientists are equipped to go into business. They do not know the difference between an S Corp and an LLC. They don't know how to navigate a state or local permitting bureaucracy. And few have a clue about marketing or managing company finances in a way that could withstand an intense audit.

These mismatches ensure that stunning amounts of stellar science remains tucked in the lab forever.

If we want to create jobs, we must first train scientists how to start companies. Tom Katsouleas, dean of Duke University's engineering school, has a potential solution, called PhD+. For PhDs who wish to start companies and have marketable technologies, Katsouleas proposes that the federal government provide funding for training in entrepreneurship to teach the lab geeks how to get along better in the startup world.

Business Exchange

Track and share business topics across the Web.