Students, creating the value-added for investors

Posted on August 17, 2014 by Gerald Barnett

University of Washington president Michael Young gave a ten-minute talk in February 2012 at the opening of a business incubator on the UW campus. The talk is fascinating as a rationalization for the $100M effort to flip faculty and student startups to investors for UW profit. I am providing annotations to draw out the implications of the talk, in a series of posts. Here they are:

President Young’s talk is in purple and my comments follow in brown, in square brackets. Here is a fifth installment:

The by-products of that are extraordinary. The by-products are jobs, are businesses, are better lives in so many different ways. Um, there are also extraordinary educational opportunities. Universities, uh, tend to do things well if they keep a very clear focus on their core missions of teaching and research and as, as, as Linden so eloquently suggested, as we draw our students into this process, they often become themselves the interface between the professors and the business community. They themselves often provide the manpower and woman power for actually creating um, uh the value-added that is necessary to really move this, this, this idea from workbench to bedside, uh to move it out into the stream of commerce are extraordinary, tremendous opportunities uh for our students and as they do that they come out much better equipped to operate in the world we are launching them into.

[Comment: The “that” in the first sentence above appears to be “a partnership with the business community that takes things out of the university into the lives of real people” (distinguished from the imaginary, imposter lives of those who work in the university). The point here is not that stuff gets out into the lives of real people, but that the university partners with investors backing startup companies holding monopoly licenses to university-owned patents and willing to pay a big upside to the university if they ever get sold to a new round of investors, and that’s how things will get out. The partnering will create companies, jobs, and better lives. It’s a nice thought, isn’t it? Continue reading →

Posted in Innovation, Technology Transfer | Comments Off on Students, creating the value-added for investors

Who ya gonna call?

Posted on August 17, 2014 by Gerald Barnett

University of Washington president Michael Young gave a ten-minute talk in February 2012 at the opening of a business incubator on the UW campus. The talk is fascinating as a rationalization for the $100M effort to flip faculty and student startups to investors for UW profit. I am providing annotations to draw out the implications of the talk, in a series of posts. Here they are:

President Young’s talk is in purple and my comments follow in brown, in square brackets.

Here is a fourth installment:

What is challenging at universities is to figure out how to do that because one may be a brilliant physicist but developing a marketing plan, figuring out how to get IP protection, uh, moving from proof of concept to, uh, to prototype to first contract, uh talking that bizarre foreign language that investors seem to use, where they actually, uh, want a return on investment. Remember that great line in Ghostbusters where they are standing actually on Columbia’s campus, uh, and at some point they are kicked out of the lab and somebody says, “Well, let’s go to the private sector” and the other professor says, uh, “Oh, no, no, they expect you to produce.” [laughter] Uh, uh, but understanding to try to connect with that business community uh, um, are, are challenges. And the opportunity to think through, What are those challenges? How do we take what is really great and being done here at this university and use with a partnership with the business community, uh, that opportunity to take it out into the lives of real people?

[Comment: Mr. Young suggests that university faculty are incapable of doing business, building on his previous use of “ivory tower” to the same apparent effect. Not only that, but faculty are lazy, happy to be unproductive. If faculty are clueless about business, what about the faculty who have left universities and done quite well in company work? What about the faculty recruited from industry? Have they too lost all sense of what it takes to develop a company?  Continue reading →

Posted in Innovation, IP, Policy, Technology Transfer | Comments Off on Who ya gonna call?

Technemort, the name never to be spoken

Posted on August 17, 2014 by Gerald Barnett

University of Washington president Michael Young gave a ten-minute talk in February 2012 at the opening of a business incubator on the UW campus. The talk is fascinating as a rationalization for the $100M effort to flip faculty and student startups to investors for UW profit. I am providing annotations to draw out the implications of the talk, in a series of posts. President Young’s talk is in purple and my comments follow in brown, in square brackets.

Here is a third installment, a double-shot of statement and comment:

Uh, in fact, somebody once described the university as a place that accumulates knowledge because students come in at eighteen years old, they know everything, and we not knowing everything, and what they’ve left behind is what accumulates [laughter] here at the university.

[Comment:  Mr. Young’s figure of thought takes the form of a joke at the expense of the university’s faculty and research staff. Somehow students bring in new knowledge, and faculty and staff are know-nothings. So on this celebratory day, only a minute into his talk, Mr. Young takes a swipe at the faculty. If students have the bright ideas before they arrive at the university, why should they involve the university at all in their business activities? Why not go straight after their ideas, as Peter Thiel has begged them to do?

Mr. Young’s figure works only if faculty, but for the incubator and other administration-provided technology management services, would hoard their knowledge. But that interpretation makes the figure come off as arrogant, especially in light of the efforts by the university administration to claim ownership of nearly all faculty, staff, and student intellectual property. Continue reading →

Posted in Policy, Technology Transfer | Tagged , , , , | 1 Comment

Who hoards technology in the Ivory Tower?

Posted on August 17, 2014 by Gerald Barnett

University of Washington president Michael Young gave a ten-minute talk in February 2012 at the opening of a business incubator on the UW campus. The talk is fascinating for the narrative it presents for UW to attempt to flip faculty and student startups to investors for UW profit. I am providing annotations to draw out the implications of the talk, in a series of posts. Here they are:

President Young’s talk is in purple and my comments are in brown, in square brackets. Here is the second part of his talk and my comment:

Now. For hundreds of years universities, um, assiduously courted the title of ivory towers—ah work hard doing great research and, uh, teaching terrific students, um, all designed to do good, uh, but largely hoarding within the university, uh, the knowledge that was generated and created.

[Comment: “Ivory Tower” applied to universities appears to date from the 1930s and has seen a range of uses. Prior to being applied to universities, the phrase was applied to artists, as any place where creative types might go to be creative, disengaged from the fussy world. Early applications to universities involved faculty stepping up to fight fascism and thus leaving their places of creative work, and later, after the second world war, scientists speaking up on civic matters and not remaining isolated in their happy industrial-military-academic complex. 

That is, the Ivory Tower was not something that universities “courted” at all, and had nothing to do with universities for “hundreds of years.” When “Ivory Tower” was applied to universities, it was by people calling for (or applauding) the participation of faculty in civic matters. The problem was that by not having a place to withdraw to, to remain isolated from pressures of commerce, strife among nations, competing ideologies, and the like, scientists were being drawn into political debates, and tempted to use their scientific standing to pronounce on debates that had no resolution in science–but which may very well affect, say, funding for science. Continue reading →

Posted in Bayh-Dole, History, Policy, Technology Transfer | 1 Comment

A very exciting day for the university

Posted on August 17, 2014 by Gerald Barnett

University of Washington president Michael Young gave a ten-minute talk in February 2012 at the opening of a business incubator on the UW campus. The talk is fascinating for the narrative it presents for UW to attempt to flip faculty and student startups to investors for UW profit.

I thought it might be helpful, therefore, to annotate President Young’s speech, so the various threads can be woven into a coherent insight into how a research university president must think about research, intellectual property management, startup companies, and innovation.

Mr. Young is not the only university president championing the university as an economic driver–any number of universities have published some statement of their “economic impact” (Here is one from UW. From UCLA. Minnesota. North Dakota. Florida. UNC Asheville. Stony Brook. Portland State. You get the picture.) Often these studies are vanity press–take some numbers, such as research expenditures, and multiply these numbers by a model-given factor to get a bigger number, and from that bigger number use another model to derive the number of jobs that must depend on the university. I have never seen an independent validation of the claimed figures. There appears to be an industry of consultants with happy economic models that take inputs and create bigger, braggable numbers. If one is into confirmation bias, then economic impact reports are a field of opium poppies.

Let’s take a closer look at President Young’s talk. I will put President Young’s talk in purple with my comments in brown, in square brackets. I will break this up into a number of posts. Here they are:

President Young:

Thank-you. Speaking of forces of nature. [laughter] Um, I’m delighted to be here today.
This is an exciting day for the University. A very exciting day for the University, an exciting day for our students, for our professors, and we think ultimately an exciting day for the state of Washington.

Comment: In what way is the opening of a business incubator exciting for the state? There are plenty of incubator facilities, co-working facilities, and multi-use buildings in the state. What is added by another? The implication is that unlike those other facilities, the Fluke Hall business incubator will have a state-wide impact greater than that of other facilities.  Continue reading →

Posted in Policy, Technology Transfer | 1 Comment

Abbroachment

Posted on August 16, 2014 by Gerald Barnett

So I got this urge to do some snorkeling in the waters of Black’s Legal Dictionary. Just a little recreational reading. But I’d barely got into the waters–first page, in the A’s–when I hit up against this rock:

Abbroachment. The act of forestalling the market by buying wholesale merchandise to sell it at retail as the only vendor.

That led me to “forestalling the market” (citations omitted):

Forestalling the Market. The act of the buying or contracting for any merchandise or provision on its way to the market, with the intention of selling it again at a higher price; or the dissuading persons from bringing their goods or provisions there; or persuading them to enhance the price when there. This was formerly an indictable offense in England, but is now abolished…

Forestalling differs from “engrossing,” in that the latter consists in buying up large quantities of merchandise already on the market, with a view to effecting a monopoly or acquiring so large a quantity as to be able to dictate prices. Both forestalling and engrossing may enter into the manipulation of what is now called a “corner.”

Once you have engrossed a market, you then can “corner” it.  Continue reading →

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Time for Research Policy–and Rhetoric–to Change

Posted on August 11, 2014 by Gerald Barnett

Over at Remaking the University, Christopher Newfield has a new essay about higher education policy. It is well worth the read. Newfield’s primary focus is the lack of policy movement in university administrations, despite chronic lack of funding–“permausterity,” as he calls it. Among other issues, Newfield argues that university research, especially research at scale in the big research universities, generally loses money:

In 2012, the National Science Board published Diminishing Funding and Rising Expectations:Trends and Challenges for Research Universities, and in the same year the National Research Council of the National Academies released Research Universities and the Future of America. Both criticized the states’ wholesale retreat from public funding.  Both reports noted that universities are increasingly on the hook to pay for research from their own internal funds–even when the research has an outside sponsor. Institutional funds are now the “second largest source of funding for academic R&D, accounting for $11.2 billion of the $54.9 billion of academic spending on S&E [Science &Engineering] R&D in 2009” (NSB p 16).  The NRC report stated that “The institutional contribution to research has been growing faster than federal funding,” which, they added, diverts money from necessities like instruction and maintenance (NRC p 125).

The big takeaways are that universities’ internal funds are the fastest-growing source of research funding, and that universities’ share is large.  The total university contribution has grown again since the NSB and NRC reports, from $11.2 billion to $13.7 billion per year.

Over the period from 1976 to 2012, the share of R&D expenditures assumed by colleges and universities has grown faster than any other category. Institutional Funds accounted for 21.6% of all R&D expenditures in 2012 (adjusting out the ARRA effect) as compared to 12.0% of all R&D expenditures in 1976—a growth factor of +80%.

What is booked as 21.6% “Institutional Funds” is largely also “costs not covered by extramural research sponsors.” The label “institutional funds” makes it appear that universities have dollars lying around that get swept up for use in research. But they don’t. “Institutional funds” come from somewhere. Where? University administrators aren’t saying. Continue reading →

Posted in Policy, Sponsored Research, Technology Transfer | Comments Off on Time for Research Policy–and Rhetoric–to Change

Are AUTM Licensing Survey Results Overstating Activity?

Posted on August 10, 2014 by Gerald Barnett

I say yes–and I suspect the yes may be significant. In uncovering the problems with the University of Washington’s reporting of its startup activity for the past two years, another issue has surfaced. Let me explain.

The University of Washington claims SNUPI as one of its flagship startups. And, yes, SNUPI has raised $7m in investment and appears to be a happy company. Here is the UW’s account of SNUPI (from December 2012): Continue reading →

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The Bully Pulpit

Posted on July 23, 2014 by Gerald Barnett

University of Washington president Michael Young gave a brief talk on technology transfer as he opened Fluke Hall as a startup incubator. In the talk, among other things Young challenged C4C, the UW licensing operation, to double the number of startups. Over the past two years, C4C and Michael Young have issued a string of press releases claiming great success. In July 2013, C4C claimed 17 startups; in June 2014, C4C claimed another 18 startups. A check of public records, however, finds only 13 startups, a number of which are paper shell companies without meaningful operations, leaving 2 startups in two years that have the profile of university-based startups with independent operations that might have some effect on the state’s economy.

This strategy is not new for Michael Young. Here is a description of the approach from an early account of the transformation of the University of Utah program (my emphasis):

a. Bully Pulpit:

One thing that always characterizes an effective entrepreneurial organization or an effective entrepreneurial community is that leaders make a visible effort to demonstrate their support for entrepreneurial activities. Vocal leadership is still more critical than generally recognized. What they say, however, and how they say it matters too. The new President of the University of Utah, Michael Young, made it a clear priority that the institution will drive economic development. He backed that statement up with a new organization structure that removed the commercialization office from under the VP for Research and aligned it with the Business School and its entrepreneurial programs. Business School Dean Jack Brittain, was promoted to run the new organization Technology Ventures, and given freedom to build a new and interactive program.

UW has put Michael Young’s vocal campaign to good use. In mid-July, UW announced that its business accelerator has been named the “emerging incubator of the year” by the University Business Incubators Global Index. Continue reading →

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AUTM Startups and UW Reporting

Posted on July 23, 2014 by Gerald Barnett

In an article about the University of Washington’s Center for Commercialization by the Washington Business Alliance, Vice Provost Rhoads defends her startup figures:

Rhoads responded, “Every single one of our startups can evidence itself to be the real deal and can meet the Association of University Technology Managers [link now broken] (AUTM) standards.” AUTM promotes technology transfer and commercialization between universities and private industry. Barnett still worries because “The data AUTM has is supplied by UW and is not audited by AUTM.”

Here is the AUTM licensing survey guidance [now disappeared from the web] for 2012 on startup reporting (emphasis in original, but I have added blank lines for readability):

START-UP COMPANIES: As used in this Survey, START-UP COMPANIES are new companies that were dependent on licensing your institution’s technology for their formation.

Continue reading →

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