Industry and academe: A mutually beneficial partnership

Nancy Ordman | September 02, 2019

In 1914, the U.S. Congress passed Smith-Lever Act, which created the Cooperative Extension Service (CES), based in land-grant universities and committed to sharing academic research with business and industry. The establishment of the CES marks the beginning of university-industry research cooperation. The research focused on agriculture and related fields and thus did not interest most companies, but the precedent was set Center for Collaboration, Rockefeller University. Source: Eyeforyou, CC BY-SA 4.0for institutional cooperation.

More than a century later, university-industry partnerships, particularly in research and technology transfer, are a common practice, growing in number over the last decade or so.

Companies realize the advantages of collaboration, particularly for early-stage research. Universities, which have experienced declining federal funding for research, can make up some of those losses and continue to support faculty and graduate student research. The model for these relationships is increasingly collaborative and less transactional.

However, the path to mutually-beneficial and productive partnerships is not without pitfalls that can trip up the best-intentioned collaborators. Developing strong university-industry partnerships is worth the effort necessary to get past the stumbling blocks.

Why cooperate?

One benefit of early CES-business collaboration is still valid today. The federal government continues to fund billions of dollars of research in every field of endeavor, sending much of that money to universities. Partnering with a university enables a company to benefit directly from research funded through tax dollars.

Another key benefit for business is that university research facilities can replace in-house research facilities, particularly since few companies can afford to support basic research facilities. Working with academic scientists gives company staff insight into current research and steers a company's research agenda toward areas of interest for future products and processes. Working with a university also gives a company an inside track for recruiting new graduates, and faculty too, although poaching faculty could restrict the education of young, future engineers and scientists.

Just as company staff learn from academic scientists, academics benefit from understanding real-world applications of research and develop an appreciation of the constraints a business places on research and product development. Students working in a collaborative research environment will be better prepared to shift to the working world. Often, students and faculty get to test ideas in a full-scale factory, learning how to scale up from the laboratory workbench. And as mentioned, funding from an industrial partner helps replace lapsed government research money.

What gets in the way

The obvious difference between academe and industry — the former is not operated for profit, the latter is — drives many cooperative agreement difficulties. It manifests in the academic need for openness and shared research results, and a company’s need to protect intellectual property. Academic science thrives on dialogue with colleagues; faculty and graduate students are required to publish their work.

Some companies have called out a related issue: the lack of reproducibility of academic research results in corporate labs. The so-called reproducibility crisis is well-documented in scientific literature; estimates of the number of irreproducible experiments range from 65% to 90% of published, peer-reviewed research.

Lack of reproducible results is a serious problem for companies that need to use test results to create products. To solve the problem long-term, researchers in both university and corporate settings will probably need to share data sets and procedures, as well as results, across institutions.

Among other barriers, such as the slower pace of university research, the elephant in the collaborative lab is intellectual property ownership. IP can be worth money — sometimes quite a lot — if it can be turned into a profitable product or process. A company can make money from producing and selling the product and licensing to third parties.

Monetizing IP is not a simple, straightforward process and one that only the most research-intensive universities are typically prepared to handle. The benefits of IP ownership can be distributed across more than one recipient, though, making ownership decisions a win-win proposition rather than a zero-sum game.

How to clear the pathway to progress

Both communities, academic and industrial, recognizing the potential of cooperation, are actively working to develop models for this cooperation. Several good resources, listed below, provide experience-based practical guidance, and general principles of engagement derive from these and other sources.

Communication is, not surprisingly, one major theme in the literature about university-industry cooperation. Frequent contact at all levels, from those directly involved with research through management, helps build trust and transparency as well as ensures the flow of needed information.

Jon Soderstrom, managing director of Yale’s Office of Cooperative Research, points out that some of the most fruitful collaborations grow from a personal relationship between a faculty member and a corporate counterpart and can start as small initiatives. This kind of relationship enables those involved to grow an understanding of each other’s institutional milieu and how best to navigate through those institutions.

Negotiate the complexities of intellectual property ownership, licensing, royalties and liability in good faith. Flexibility is a key guideline. IP can be licensed for varying periods of time. Profits can be apportioned in different ways, reflecting contributions from each partner and the amount of liability each assumes. Soderstrom suggests working out a master agreement early in the collaboration that spells out concerns for both sides, like publishing interim progress reports versus maintaining confidentiality.

Companies should consider funding early-stage research, not just research that is close to the end stage. Partnering early in the process allows a company to guide research toward relevant and potentially financially productive directions. Longer continuous engagement also fosters mutual understanding.

Why cooperation is worth the effort

A report published in June 2017 estimated the 1996-2015 economic impact on the U.S. economy of licensing academic-held IP at $1.33 trillion, in 2009 dollars. The potential for private industry to help create and benefit from this IP should interest C-suite managers. Universities can see the benefits of long-term relationships with industry, with steady funding for research underwriting salaries, graduate students and research facilities. As these relationships develop, participants can document successes and failures and develop recipes for others to follow.