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  • Josh Sevin
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Business Growth

Technology Transfer: Are We Making Progress?

After several years of increased focus and investment in boosting technology transfer in Greater Philadelphia, are we making progress?


A New Look at Tech Transfer in PHL


Last month, the CEO Council for Growth released a new report on technology transfer – the translation of research discoveries into commercializable products and services – that revisits analysis and strategy work done by the Economy League of Greater Philadelphia almost a decade ago.


The previous tech transfer study ended up sparking several promising new collaborations – including the launch of the University City Science Center’s QED proof-of-concept fund and the Quorum clubhouse space – while elevating commercialization as a regional economic development priority. Connecting industry and universities to drive technology transfer was subsequently identified as one of six long-run business growth priorities for Greater Philadelphia in the World Class Business Growth GPS released in 2013. (Another key regional growth strategy – spurring global business – is the focus of a major Economy League- and World Trade Center of Greater Philadelphia-led metro export initiative this year.)


Given the increased focus on technology transfer at area research institutions and across economic development organizations over the past few years, does the CEO Council’s update show that we’re making progress? Persistent lagging regional job growth lends greater urgency to the question of how we can build on our research strengths to catalyze stronger growth. The new analysis prepared by Econsult Solutions focuses on reasons for concern – to the exclusion of highlighting a few critical bright spots that indicate recent tech transfer investments might be starting to pay off.


Reasons for Concern


The new analysis compares Greater Philadelphia’s 2007 ranking among competitor metros for seven key technology transfer metrics – STEM degrees awarded, R&D funding, invention disclosures, patents granted, licenses executed, startups formed, and venture capital funding – with its 2012 performance. When grouped into different categories representing initial research inputs, innovation activity, and market outcomes, the report finds that Greater Philadelphia’s ranking fell one place for each category and dropped from 5th in 2007 to 6th in 2012 in a composite tech transfer index. This places Philadelphia behind tech transfer heavyweights Boston, New York, the Tech Coast (a creative mash-up of the Los Angeles and San Diego metros), San Francisco, and Raleigh-Durham.


Regardless of whether one classifies this slip as troubling, there’s clearly substantial room for improvement. Our region’s lower ranking in patents granted (6th) relative to invention disclosure activity (4th) underscores the potential to strengthen commercialization of promising ideas and technologies emerging from research institutions. The report goes on to point out that much of this disconnect can be explained through the importance of engineering and computer science in driving innovation and patent activity. Given Greater Philadelphia’s recent emphasis on life sciences- and biotech-related research and innovations, it’s an argument for diversifying university strengths beyond life sciences and finding ways to elevate the work of the region’s engineering schools – in particular at the intersection of existing regional health careenergy, and advanced manufacturing strengths.


Reasons for Optimism


The new report gives short shrift, however, to positive recent trends for some key tech transfer metrics in Greater Philadelphia. (For the Economy League’s look at the region’s tech transfer performance in the 2014 World Class Index, click here.) 


Greater Philadelphia had the largest growth rate in the number of licensing agreements among top R&D regions between 2008 and 2012, almost doubling (+94%) from 83 to 161. Our region has had similar dramatic growth over the same period for invention disclosures (+26% from 682 to 860), patents awarded (+114% from 78 to 167), and spinout companies formed (+317% from 6 to 25).


You could say that high recent growth rates for these innovation activity measures are due, in part, to the region starting from lower baseline levels – but they’re notable increases nonetheless.

And the top metric chosen for the World Class Index to gauge marketplace success for tech transfer efforts – licensing revenues – is also on a positive track. Between 2008 and 2012, area institutions took in almost $595 million in licensing revenues for technologies that achieved marketplace success as a result of license agreements with businesses, ranking our region 5th among U.S. metros. Given that Greater Philadelphia ranked 8th in total federal R&D funding over the same period, this suggests that our region is holding its own compared to other metros in capitalizing on its research resources for commercial success. While Greater Philadelphia’s licensing revenues are still significantly lower than those for the four metros in front of us – one-half of Boston’s total, one-third of Los Angeles’ and Chicago’s, and one-quarter of New York City’s – these regions also receive substantially more federal R&D funds.


Why is emphasizing these positive data points and trends in Greater Philadelphia just as important as acknowledging room for improvement around converting promising technologies to the marketplace? Because a lot of new leadership energy and investment – especially within the region’s major research institutions – has focused on improving tech transfer processes and results since 2007. We are seeing a growing number of area university and health system presidents elevating commercialization as an institutional priority. Several research institutions have remade and significantly boosted resources for tech transfer offices. These institutions are also emphasizing entrepreneurship as a promising pathway for both research faculty and students like never before.


In light of this shift in priorities and investment toward tech transfer and entrepreneurship on campus and in research labs across the region, it’s important to make sure we recognize the real progress that has occurred as a result of recent efforts. If we hope to sustain and expand upon recent tech transfer efforts, we need to ensure we make the point that we’re seeing some signs of progress.