Israel's technology transfer companies, which must transform academic ideas into marketable products are struggling. Revenue of Israel's tech transfer companies declined from a peak of NIS 1.9 billion in 2012 to NIS 1.36 billion in 2016, the most recent year examined by the Central Bureau of Statistics.
The failure of tech transfer companies to generate revenue for academic institutions has been discussed by various reports published by researchers at the Israel Institution of Technology (Technion), Samuel Neaman Institute for National Policy, Taub Center for Social Policy Studies in Israel, and Israel Technology Transfer Network (ITTN), a roof organization for the commercialization companies. In recent months, a National Council for Civilian Research and Development committee for academic-industrial ties and the National Economic Council have held discussions on the subject, and have written recommendations for streamlining the transfer of knowledge from academic institutions to industry.
The committee formulated nine practical recommendations, which are being revealed for the first time in "Globes." The ministerial science committee is scheduled to discuss these recommendations in the coming weeks.
The committee emphasizes business training for academic staff, researchers, and doctors; commercial use of databases run by health organizations in Israel; and setting new measures for assessing the transfer of information.
The National Council for Civilian Research and Development, an agency for which the Ministry of Science, Technology, and Space is responsible, is designed to provide advice to the Israeli government on civilian research and development, so that the government can set policy that will ensure optimal use of the state's resources and economic prosperity. The National Council for Civilian Research and Development works through national committees of external experts and consultants that discuss various sectors and formulate recommendations about research and development in their fields. The recommendations for commercialization of academic knowledge, which were submitted to Minister of Science, Technology, and Space Ofir Akunis a few weeks ago, were composed by the committee for academic-industrial ties. This committee contains people from government, higher education, industry, education, and representatives of the university commercialization companies. This is the first time that representatives of the commercialization companies were involved in discussions by the government committees handling this subject. A source involved with the committee's discussions said that the submission of the recommendations to the minister of science, technology, and space when a transitional government is in office was designed to put the question on the agenda ahead of the formation of a new government.
The committee's success criteria
The committee's recommendations are based on two studies, one by the Deloitte consultancy and accounting firm and one by the Samuel Neaman Institute, conducted at its initiative and that of the National Economic Council in the Prime Minister's Office. The committee also took in to consideration an independent study by Samuel Neaman Institute Prof. Arnon Bentur. The committee's discussions were designed to continue a process that began in 2011, when the Ministry of Finance formulated a national plan for bolstering transfer of knowledge between higher education and industry. Most of the Ministry of Finance's recommendations were implemented, resulting in Israel being rated second in the world in the transfer of knowledge from academic institutions to industry in the most recent report by the World Economic Forum.
"Israel is one of the global leaders in applying academic research. At the same time, however, there is much room for improvement," National Council for Civilian Research and Development R&D policy advisor Neal Naimer told "Globes." Naimer, who coordinates the committee for academic-industrial ties, says that commercialization companies in Israel and elsewhere are not profitable, as shown by studies conducted on the matter, in particular a study by the Samuel Neaman Institute published in "Globes" earlier this year. "We have found a number of strategies suitable for the Israeli ecosystem that can streamline the transfer of knowledge from higher education to industry. This will increase the economic contribution of academic institutions to the economy, which will be added to the traditional goals of research and teaching."
The committee chose to focus on four areas: strengthening the commitment of higher education and industry to cooperation, ways of improving communication between higher education and industry, ways of improving business agreements and coordination of expectations between the agencies, and channeling resources and infrastructure financing for translational research for the early stages, before proof of concept.
In order to reinforce commitment among institutions to the transferal of knowledge to industry, the committee recommended that the boards of directors at the commercialization companies focus on five different and equally weighted criteria for success, rather than on just the revenue line: revenue, research financed by the private sector, the number of new licensing agreements, the number of new startups, and approved patents. A source involved in the committee's discussions told "Globes" that the commercialization companies' representatives had said that as of now, their boards of directors were measuring the commercialization companies' activity solely according to revenue.
In improving communication of higher education and health institutions with industry, the committee recommended expansion of the activity by entrepreneurship centers at the universities and instituting special programs for academic staff. The entrepreneurship programs currently focus on students. The committee is now recommending expansion of these programs to staff members, researchers, and doctors in order to expose them to business processes and concepts.
"There are a number of examples of researchers not knowing what happens in industry and being unaware of the economic value of their research. Talks with industrial experts provide important help for economic applications and success," Namir says. Another recommendation in this context is creating temporary positions for entrepreneurs and industrial experts in in-house expert or entrepreneur programs. Such programs are common in private entrepreneurship incubators and accelerators, in which experienced entrepreneurs come for designated periods to obtain business advice from the members in the program.
Therefore, instead of fully adopting the reports' conclusions, the committee recommended establishing frameworks for providing interface points between higher education and industry that will encourage the formation of personal and business ties. Examples of this are professional conferences for academics and industry figures, platforms for finding potential partners, and making available information about the prevailing commercial terms and standard legal principles in commercial cooperative ventures. The first conference of its type, which took place last month, was organized by ITTN.
As for financing, the committee detected a gap in financing research at the initial stage. Namier says that research for which a patent has been registered and business proof of concept has already been demonstrated usually stands a fairly good chance of obtaining financing from commercial concerns. On the other hand, in the stage before a patent is registered, when only an academic or theoretical article is involved, researchers have difficulty finding financing to continue the research and reach the commercialization stage.
The committee recommended two measures in order to solve this failure. The first is internal investment funds for the universities for the purpose of financing knowledge with practical potential, without waiving the intellectual property rights. The committee recommends establishing such funds with government money, together with financing that each academic institution will raise by itself. The committee also recommended increasing financing for two government support tracks: KAMIN in the Israel Innovation Authority and the National Foundation for Applied Scientific and Engineering Research (MIYA), both of which were designed to finance early-stage research.
Published by Globes, Israel business news - en.globes.co.il - on December 11, 2019
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