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Can the University of Hawaii make millions off its research?

Building the research enterprise at the University of Hawaii

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Tech Transfer

Yet another challenge is UH’s Office of Technology Transfer and Economic Development. OTTED’s job is to find companies willing to develop and commercialize the basic research done at the university. Tech transfer programs like OTTED stem from the Bayh-Dole Act, passed in 1980, which allows universities to license and sell technology created through federally funded research. But many people, both at the university and within the Hawaii business community, believe UH does a poor job of commercializing research done by its faculty. In fact, HITex, one of the principal, if still tentative, components of HI2, is meant to replace OTTED and reinvigorate the university’s tech transfer program.

But not everyone agrees that OTTED is at fault. Jonathan Roberts, senior licensing associate and, in the absence of a director, the unofficial COO at OTTED, says part of the problem is that UH research excels in areas that simply don’t produce many patents. Fields like marine biology, astronomy and ocean sciences, for example, will never produce many commercial products. In 2010, Roberts produced a table showing each department’s number of disclosures – potentially patentable discoveries – over the previous five years, and compared that number with benchmark numbers furnished by the Association of University Technology Managers, based on the amount of federal funds received. The numbers are eye opening. Researchers at SOEST, which raised $681 million in federal funds, only filed 39 disclosures, as compared to 272 for the benchmark. JABSOM, the university’s young medical school, raised $289 million in federal funds, while generating 63 disclosers, half the 115 benchmark. And the Department of Biology raised $141 million, while generated no disclosures at all.

There are reasons for this anemic showing, Roberts says. For example, a big chunk of the federal grants going to SOEST were simply to cover ship operations – a laudable goal, but hardly one that will produce many patents. JABSOM, he points out, was founded as a teaching college, and has only recently begun to emphasize research. And, perversely, the Department of Biology’s low numbers are largely because of the success of Dave Duffy and his Pacific Cooperative Studies Unit.

“He researches things like the impact of global warming on wildlife populations, basic science in botany and biology,” Roberts says. “Stuff that’s in the news and obviously important to society. He’s advancing the frontiers of knowledge. He’s got a research institute that employs a whole bunch of people. It’s a wonderful thing; but it’s never going to generate a whole bunch of intellectual property.”

Engineering

One bright spot for OTTED is the College of Engineering, which generated 146 disclosures, versus just 25 for the benchmark. But Roberts points out this is largely because of one extraordinarily productive researcher: James Holm-Kennedy. This highlights the uncertainty of tech transfer. Over the years, Holm-Kennedy has generated dozens of patents for the university, including one for a device that can sequence a human genome for less than $1,000; that patent was recently licensed to a tech firm and could generate enough income for the university to run OTTED for years to come. But Holm-Kennedy is the exception, and that’s normal for a university’s tech transfer operation.

“The problem,” Roberts says, “is that tech transfer has been oversold.” Many, for example, believe the university should be able to use the tech transfer process as a way to midwife a private tech sector into existence. Roberts doesn’t buy it. “Even if a huge enterprise should start up here, based on some locally developed technology, you know that it’s going to move to California. It’s just impossible to establish something like that in the most remote inhabited area in the world. The first licensee that we had, New Genesis, operated here for five years and moved to California. Look what happened to Verifone. They started up here and they manufactured here. But then the manufacturing moved to Malaysia and the corporate headquarters moved to the mainland. That’s always going to happen. If you go to somewhere like North Dakota, it’s the same deal. Yes, a firm might start in North Dakota, but it’s going to move to Chicago.”

Katharine Ku, director of the tech transfer program at Stanford University, widely viewed as one of the best in the country, agrees with Roberts. “It’s worse than a statistical game,” she says. “We’ve seen about 9,200 inventions over 43 years, but we’ve only had three that we consider big hits: Cohen-Boyer (recombinant DNA), functional antibodies (an HIV diagnostic) and Google. In fact, for most universities, tech transfer is an expense center because you have to spend a lot of at-risk money.”
Still, tech transfer, when it works, can be a powerful tool for research institutes. “I’ll give you an example,” says Carbone of the Cancer Center. “Another cancer center that’s a little bit bigger than ours – I won’t say the name – had an income of $72 million from grant funding, and they have a little over 100 researchers. Compare that with us: We brought in about $30 million from about 32 researchers. So, you can see our researchers are doing better than their researchers. …”

“But, when you look at the amount of money that other cancer center made through patents, they made $200 million. The amount we made from patents was zero. So, there you see a tremendous opportunity for us to grow.”

Still another problem for HI2 is how it manages its federal overhead. That percentage isn’t set in stone; it varies from university to university, and even from department to department. The federal government periodically audits the university to determine indirect costs, based on how much the university actually invests in the research enterprise. And David Karl points out, “We have an embarrassingly low overhead rate for a public university: 32 percent. The University of Washington at Seattle, for example, has indirect costs of 60 percent. Private universities are 70 percent to 75 percent.”

The reason the University of Hawaii’s rate is so low is simply because they don’t invest in research, Karl says. “Our overhead rate has dropped since I’ve come out here, because the federal government periodically comes out here and says, ‘Well, you haven’t been making any investments.’ It’s a vicious circle. Unless you invest, you’ll never be able to recover more money. We’re leaving money on the table.”

Reasons for Optimism

Many don’t accept the premise that there’s a dichotomy between research and teaching. “That’s the old model,” says Bill Ditto. “To be honest, that’s where we’ve dumbed down so many of our universities. We have this idea that teaching is punishment, and the reward for success is that you’re bringing in a lot of money. Neither of which is true. The best researchers are the best teachers.”

Like Ditto, Peter Quigley sees research as an intrinsic part of modern education. “That’s why a Stanford or a UCSD is impressive,” he says. “It’s where knowledge gets taught; but it’s also where knowledge gets made. And students who get to go to places like that, who see actual problems solved, actual discoveries made, are people who are touched forever.”

Ditto also believes in the power of a few good people. So, even if UH can’t attract 50 of the best and brightest, HI2 could still succeed. “You’ll get the occasional superstar or experienced person,” he says, “and then you get a whole lot of talented young people, and you change the world with them. … I think we’re very much at the cusp of a real renaissance at the University of Hawaii, and I want to be a part of that.”

That’s not just idle talk. Ditto has already built two major research programs from scratch. At Georgia Tech, he helped create the Department of Biomedical Engineering, which he says grew from three faculty members, no students and no staff, to one of the most successful programs in the country, with 280 graduate students, 900 undergraduates and something like 60 faculty. His approach also worked at the University of Florida, where he also created a Department of Biomedical Engineering. “At Florida,” he says, “we ended up being the richest department on campus and, again, I started with no faculty, no alumni and only two staff members. That was tough. Now, it has a $20 million endowment, a $100 million building and it’s thriving.”

Ditto attributes this success to focusing on the quality of the research rather than the money, a strategy he thinks applies to UH as well. “It works,” he says. “It’s pretty standard and it’s old-school. You get creative people who attract more creative people. And they all have the right values, which means they value teaching, they value creative research. As I tell people here, it’s not about money. If you’re chasing money, we don’t want you. Money should be chasing your ideas. That’s our value system, and that attracts the very best.”


 

Extra Mural Grants, including Federal funds, to the UH System

Funding is for research, job training and workforce development. UH hopes to increase extra mural funding to $1 billion a year by 2022.

Source: University of Hawaii

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