Dear Reader

Business Development is a complex topic. In such case the questions raised are more important than potential answers. Therefore, this blog will focus on presenting questions. There will be answers, full or partial, to be supplamented by links presented when relevant. The answers from my experience will be clearer once the questions are clearer.

While this is not a discussion forum, readers are invited to comment, and the comments will help determine the topics and current issues to be explained in the future.


Friday, July 27, 2012

Changing the Technology Transfer model?

The Technology Transfer operating model in Israel for the last decades has been that of a Technology Transfer Company (TTC) a commercial separate legal entity – a company limited by share, fully owned by a single university.
That model has shown a good fit for the special circumstances in Israel. The universities have managed to support their TTC and allow them to evolve to the stage of financial independence, to employ personal outside the limitation of public institutions and to act as business oriented entities with certain academic limitations.
However, a few months ago a new idea appeared on stage with potential interesting circumstances. The Council for Higher Education  (CHE) has published a call for proposal (tender) for forming a TTC for the colleges it sponsors. The CHE was responding to a recommendation of the prime minister to do something for the colleges.
That move signaled two interesting points; the first being that the CHE recognizes the need of the colleges to enhance their research activities and to become more than just teaching institutes. The second, by suggesting a single firm for several colleges, they were introducing a new model for TTC operation in Israel.
The first point will be referred to at another time. However the introduction of the new model of TTC operation in Israel may have interesting implications. Israel has at the moment seven research universities, each with its own TTC. The justification of that model has been based on the direct support that each university gave to its TTC in its formation stages, and on the claim that a TTC of two universities may be presented with a conflict of interests when having to decide between competing technologies originating from different universities regarding their protection and commercialization.
However, both these arguments loose a lot of their credibility when looked into in depth. The first claim regarding the financial backing, the universities have been supported in their budget by the government (through the financial arm of the CHE) since each was established by law (or in the case off these preceding the state since its formation). Therefore the "internal funds" in most cases came from the public, and therefore could in theory be managed jointly….
The second argument may seem both practical and ethical but in fact that chances that in a single university with a strong research center focused on a sector (e.g. nano-science) there would be several research groups working on closely related topics that would from time to time come up with competing technologies for protection and commercialization, and the TTCs have evolved an internal system to overcome that in-house conflict of interests. Furthermore the German model seems to have found some solutions for such problems (TLB). A  center for renewable energies as recently formed in Tel Aviv University boasting some 55 different research groups would certainly come with competing solutions to similar "hot" problems in that area. Would anyone expect a TTC to be formed for each competing solution?
The real bastion against the unified model has been the success of the existing model. The revenues accrued by the TTC of the Weitzman Institute (Yeda) and the Hebrew university TTC (Yissum) as well as the others supported the existing model – if it works do not change it…
The new model for TTC operation in Israel, however, if successful and with the support of the German model, to remove the claim for the difference due to universities versus colleges, could lead to a strong pressure to unify the universities TTC. After all Israel is not such a big place, and a single company could cover the whole country. Since we are dealing with public funding, such a move could be regarded by decision makers as interesting and certainly as warranting a closer look.
Will the new model be successful?  Should the university TTCs unite?