Study finds problems in commercialising innovation -

A study of how New Zealand's research and tertiary institutions are handling the commercialisation of scientific and technological innovation has raised serious questions about the effectiveness of the current system.

The study concluded that the wide variety of approaches and different levels of expertise found in the various universities and Crown Research Institutes raised transaction costs for companies trying to commercialise the innovations developed by universities and research institutes.

The findings of the study by academics Mark Ahn, Brendan Gray, Alan Collier, and Rebecca Bednarek from Victoria and  Otago Universities was presented to a small business conference in Wellington recently.

The 305 respondents to their survey came from the innovation sector, broadly defined to include researchers and scientists, technology transfer staff, advisers in government agencies, company directors, entrepreneurs and investors, and professional advisers like patent attorneys and accountants.

"Two-thirds of New Zealand's intellectual property and scientific publications come from universities and research institutes, so improving the commercialisation of innovations developed in these institutions is important due to its potentially significant economic impact," the study's authors say.

The survey reveals a clear division of opinion over the role of Technology Transfer Offices (TTOs) in the research and tertiary sector, the ability of the staff in the TTOs to do their jobs, and over funding priorities. 

All eight universities have established TT0s to help their staff commercialise inventions and innovations, but the performance of these offices - and their counterparts in the CRIs - is very mixed.

Among the universities the University of Auckland was rated the best, with 73% of respondents rating the institution as "innovative/highly innovative", followed by Otago University (55%), and Waikato and Massey Universities (37%). Lincoln and Victoria Universities were rated the lowest with scores in the twenty to thirty percent range.

AgResearch was rated the best CRI with 62% of respondents rating it as "innovative/highly innovative", followed by Industrial Research Ltd (IRL) and Plant and Food Research (52%) and the Forest Research Institute (45%).

The authors recommend that technology transfer offices adopt a uniform approach to "align missions, reduce transactions costs, and enhance the effectiveness of commercialisation strategies and practices."

New Zealand currently ranks 26th on the International Innovation Index, and the previous government was keen to improve on this as part of its Growth and Innovation Framework. This included funding centres of excellence and fostering better linkages between tertiary education providers, industry and communities. 

Respondents agreed that innovation had the potential to spur New Zealand's economic development, but there was a wide diversity of opinion about what sectors should be targeted and how commercialisation should be organised.

Respondents were almost equally divided on whether funds should be allocated to institutions to research areas they selected themselves or whether government should target funds to specific sectors.  This was seen as an issue of academic freedom versus a focused investment strategy.

"Those who preferred to allocate resources to specific sectors, strongly suggested investing in the agriculture and food sector - where they saw New Zealand as being world class - as opposed to emergent industries such as biotechnology and ICT," including clean energy and the creative industries.

A majority of respondents felt that TTOs should be structured for both profit and commercialisation, and also for non-profit/service provider lines, which the authors note "is exceedingly difficult to operationalise in practice."

Respondent also favoured technology transfer to local firms, rather than maximising profitability through selling innovations to global companies, a strategy which the authors comment, "diverts TTOs from establishing important international linkages and thus slows speed to market and reduces profitability."

The study also concluded that "a significant portion of the scientific community perceive that some technology transfer offices lack the requisite commercial skills and processes to effectively identify good ideas and turn inventions into innovations."

 Published in the National Business Review of 23 October 2009