By Rosemarie Truman
I have been doing private sector growth strategy for ~20 years, so when I came across the Kauffman Foundation’s book titled “” I was indeed intrigued. This analysis concentrates on understanding the links and influences among law, innovation and growth, as well as how to effectively advance growth. In addition, having recently completed a comprehensive assessment of all university technology transfer frameworks and performing a subsequent benchmark, I also was eager to review Kauffman’s critique of technology transfer offices. As a result, I focused most of my attention on the section, “Universities and Economic Growth.”
Let’s first discuss a couple key areas that Kauffman’s book very well articulates:
Key Takeaway 1: Kauffman’s book mentions that there are no perfect measures to judge university technology transfer success
Supportive Argument: My team performed a comprehensive assessment of different technology transfer performance management models for universities, examining measures such as FTE productivity only, financial efficiency only, and effectiveness only, and so on, and all of them have opportunities for improvement. A comprehensive model to measure technology transfer success in universities is needed and also critical, or the wrong behavior will be encouraged, possibly leading to an undesired result, or “suboptimal performance,” as Kauffman references
Key Takeaway 2: Kauffman’s book points out that “technology transfer officials have no interest in calling attention to university presidents or other university leaders the suboptimality of the current system, assuming they believe this to be the case”
Supportive Argument: Without agreeing or disagreeing with this statement, a resistance to change is a common scenario that occurs with the biggest and best organizations, as well as small organizations of 20-30. It is the nature of change management and people’s normal acceptance/resistance to make change. It takes courage, conviction and commitment to change
While the above takeaways provide some great food for thought, let’s go to areas that need further consideration. Some of the fundamental points cited do not align with our analysis, and, therefore, could be misleading and inconclusive. And here’s why:
Discussion Point 1: Kauffman states that “most technology transfer offices are under-resourced and cannot effectively compete in the market for talent in identifying promising commercial opportunities”
Consideration: In our technology transfer analysis referenced earlier, we found, contrary to Kauffman’s conclusion, that under-resourced tech transfer offices exist, and some are very successful. We also found that creating a properly resourced technology transfer office does not guarantee success. The average best-in-class performer has 17 people in the technology transfer office and was typically properly resourced, while the average under-performer has 43 personnel and was normally over-resourced. Finally, we found that having the type of resource is important. It is critical to have the right experience level, autonomy, management styles, etc.
Discussion Point 2: Kauffman provides a detailed argument that “there is little evidence that technology transfer officials even believe the current system is suboptimal in any way”
Consideration: In my experience, several technology transfer leaders freely discuss their interest in improving. In fact, I have heard technology transfer officials, whether best-in-class, worst-in-class or in the middle, unequivocally state this and take proactive actions to improve
Discussion Point 3: Kauffman comments on the suboptimal performance of universities, stating that there are “several reasons for believing that they could do even better”
Consideration: The reason for suboptimal performance is often the lack of a good performance management system. Metrics of success need to be management-based and consistent, which is beyond what current frameworks measure. Also, there is evidence of “best-in-class” performers in the technology transfer space (e.g., Caltech is a good example of a best-in-class performer). These good performers generally have three characteristics in common – high people efficiency, high financial efficiency, and effectiveness (i.e., focused on the right objectives) – and, the result, strong ROI (in the classic sense), with income created (based on expenditure). We have some really good findings on specifically what these universities do differently, but will save this for another blog
Discussion Point 4: Kauffman states that entrepreneurs are the basis of economic growth and, further, that inventors should be in charge of how technology transfer occurs
Consideration: While entrepreneurship certainly is important and one lever for economic growth, we concluded that the key to spur economic growth through entrepreneurship is via collaborative relationships between entrepreneurs and larger companies. In addition, inventors normally are brilliant at inventing, but not at development and commercialization. It is critically important to surround the inventors with the proverbial “dream team” of capabilities to ensure that the inventors’ creations reach their potential
The end result of Kauffman’s “Rules” is a list of “best-in-class” universities. Our analysis has different results as we have constructed a holistic view of how to measure “best-in-class.” As the U.S. strives to out-compete the world in innovation, it is imperative our road map is informed by a rigorous, evidence-based, comprehensive analysis, so let the conversation begin!
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