Bridging the Gap: How KPI-Driven Universities Can Resonate with Scientist-Entrepreneurs in Medical Innovation

Particularly universities, which possess greater market-oriented core competencies compared to clinical-focused medical centers and research-led scientific institutions, demonstrate more pronounced incubation benefits from early-stage projects in terms of practical output.According to statistics from VCBeat’s Orange Fruit Bureau, among the 97 startups that completed early-stage financing between January and May 2022, more than 85% of their founders came from universities.

Even so, universities currently face numerous limitations in medical innovation and incubation. Among these, the most critical issue isHow Can Universities and Scientists Reach a “Consensus” on Translation?—How Both Parties Can Address Sensitive Issues Such as “Ownership of Intellectual Property Rights” and “Benefit Distribution” Through “Effective Communication.”

Although they are “close kin,” a certain gap persists between scientists and universities, and this divide widens over time. This is because the two parties hold fundamentally different positions.

From the scientists’ perspective, they wonder why they must share such a substantial portion of the proceeds with universities when commercializing the fruits of their arduous research and development efforts. From the universities’ perspective, they question why they are being sidelined at the stage of realizing economic benefits, given the significant support they provided during the R&D process.

In fact, neither party is at fault; the error lies in the failure to establish a “balance” between them, and this “balance” may be a concept, a method, or a system.

China’s path to medical innovation has never lacked “trailblazers,” with the number of patent applications ranking first globally for three consecutive years.However, only 10% successfully make it to translation, and less than 5% ultimately achieve commercialization., which means that most medical innovation projects fail to cross the "Valley of Death."

There are many reasons for this, such as the fact that scientific research achievements are not always suitable for conversion into economic benefits, researchers are often only interested in “publishing papers” and have little interest in technology transfer, and there is still a shortage of professionals needed for the commercialization of research outcomes.

However, among these institutions, universities all share a common problem, namelyResearchers and university technology transfer offices lack a profound understanding of the market, and this cognitive bias leads to mutual distrust, thereby causing disagreements during the commercialization process.

Let’s start with researchers. Having spent long periods in laboratories, researchers tend to focus more on technological invention than on the commercialization of their achievements, which often leads to a lack of accurate understanding of the industry and makes them prone to getting bogged down in minutiae during the translation process. In such cases, professional institutions are needed to provide support for the commercialization of their research outcomes.

However, technology transfer offices at universities and colleges currently suffer from common misconceptions. On one hand, as the trend of innovation and commercialization in the healthcare sector has only recently reached Chinese universities, these offices have been established for a relatively short period, and their understanding and operational models still require further exploration. On the other hand, they lack core competencies in innovation and commercialization, and their related market resources are neither comprehensive nor precisely targeted.

Therefore, both researchers and university technology transfer offices currently need to continuously explore ways to advance along the innovation and commercialization chain. However, in this forward-moving process, conflicts still exist regarding the “distribution of benefits” from technology commercialization, due to their differing positions.

On one hand, how should the benefits of commercialization be fairly distributed? How much should researchers receive? And how much should university technology transfer offices receive?From the perspective of higher education institutions, universities not only provide researchers with laboratories and equip them with relevant research facilities but also offer platforms to showcase their achievements. The establishment of such platforms has also consumed substantial financial, material, and human resources.

However, researchers also believe that the generation of scientific achievements primarily stems from their own efforts and research, and since most technology transfer agencies get involved only in the mid-to-late stages, they deserve to receive a larger share of the benefits from commercialization.

On the other hand, who holds the ownership of translational outcomes is also a point of contention.Technology transfer is a long-term and complex process, involving numerous critical junctures that require decisive leadership; moreover, the efficiency of decision-making at these stages can significantly influence the ultimate outcome of the translation.

However, at present, the ownership of most domestic research achievements is held by university technology transfer offices, making it difficult for researchers to independently pursue market-oriented initiatives. This “difficulty” is primarily reflected in the approval process.The approval process is complex, with a considerably long cycle.This often delays or even halts the commercialization of scientific research outcomes, causing significant distress to researchers.

However, there is a rationale behind the approach adopted by university technology transfer offices. After all, scientific research outcomes often enter the market under the university’s name, and the stringent approval process implemented by universities is primarily driven by considerations of both economic and social benefits.

The problem already exists; how can it be resolved?

Globally, many overseas universities began commercializing their research outcomes relatively early. Taking the United States as an example, the rate of commercialization of academic research achievements in the U.S. had already climbed to 80% by the early 1990s. Even today, the conversion rate of scientific research into practical applications in high-tech fields in the U.S. remains above 50%.

How do overseas universities strike a balance with researchers in the distribution of commercialization proceeds?

· Oxford: Colleges hold monopoly over intellectual property rights

Scientists provide the technology to generate research achievements, while technology transfer agencies provide funding and build resources to help scientists commercialize these achievements. So, once commercialized, who should own the resulting intellectual property?

Regarding this issue, the University of Oxford has provided a straightforward answer:Universities are providers that create R&D environments for researchers, and they are also the owners and monopolists of intellectual property rights in scientific and technological achievements.

Such regulations are neither arbitrary nor intended to appropriate scientists' research achievements; the University of Oxford has its own reasons.

Although the University of Oxford holds the intellectual property rights to its research achievements, it alsoResearch Awards, Corporate Equity Allocation, and Royalties from Intellectual Property LicensingReturn to researchers under an equal distribution model.

A portion of the profits generated from the commercialization of scientific research outcomes is allocated as compensation for researchers, thereby further incentivizing their active participation in research and development. Meanwhile, universities are responsible for providing the necessary favorable conditions and a supportive environment for researchers, offering material guarantees that enable them to conduct focused research and pursue bold innovation.

Without a platform to translate scientific and technological achievements into commercial value, such achievements would remain mere theories and concepts shelved and unused. The value that the University of Oxford brings to startups stems not from preferential policies, but from high-quality services. It is the establishment by academic institutions of platforms that transform research concepts and ideas into reality that serves as the key to successful business incubation.

· University of Toronto: Technology holders are free to choose

If Oxford’s approach is considered too radical, making it somewhat difficult for scientists to accept, then the University of Toronto’s method is more moderate.

The University of Toronto has introduced a specific policy addressing the issue of ownership of outcomes—"Free Choice by Technology Holder": Researchers can choose to possessIndividual Ownershipand bear full responsibility for patent fees and the commercialization of the technology, or alternatively choose to transfer this technology toUniversity of Toronto. If the technology is transferred to the University of Toronto, the technology holder can still participate in the commercialization process.

If individually owned technology is selected, the technology holder shall provide assistance.Innovation and Partnership Office (IPO)Preparation of marketing materials and identification as potentialLicensee. It is also necessary to work with the Innovation and Partnerships Office (IPO) to identify companies and contacts that may be interested in its technology, and to create non-confidential marketing materials for potentialLicensee Sharing。

Finally, the Innovation and Partnership Office (IPO) must be granted sufficient rights to information and adequate opportunities for engagement. Technology holders are required to inform the IPO of significant developments regarding technology-related intellectual property (IP), forthcoming publications, or corporate communications involving IP. By keeping the IPO informed and engaged, the office can better guide technology holders in securing potential financing opportunities or accessing other valuable resources.

The University of Toronto has vested researchers with the authority to determine ownership rights. While this approach is more readily accepted, it has, to some extent, increased researchers’ workload. Despite assistance from the Innovations and Partnerships Office (IPO), researchers remain the primary drivers of commercialization. The additional effort required to address commercialization issues may consequently slow down the pace of technology transfer.

· Harvard University: Revenue Distribution Regulations for Technology Transfer Achieve Incentives and “Feedback”

In addition to the ownership of scientific research achievements, benefit distribution is also a major point of contention among many scientists and institutions.

Harvard University established the Office of Technology Development (OTD) in 2005., and is solely responsible for the commercialization of invention patents. Since its inception, the Office of Technology Development (OTD) has provided funding support to more than 145 Harvard-affiliated startups worldwide, generating substantial economic benefits for Harvard and its affiliated startups.

It is worth noting that the allocation relationship between the Office of Technology Development (OTD) and scientists is not merely a proportional division of commercialization profits, as seen with other institutions and researchers. Instead, it has its own mechanism to incentivize scientific personnel and enable them to “give back” to their own research efforts.

Harvard University’s current regulations on the distribution of proceeds from technology transfer, revised in April 2010, exhibit three key features:

First,Clear Target Audience. There are clear and actionable allocation plans for all distributing entities, whether they are laboratories, colleges, universities, and R&D management funds, or one or even multiple creators.

Second,More Work, More Pay. Revenue distribution can be based on the relative value of each creation, with creators typically receiving around 30% as personal income, and all such earnings shall be paid directly to the individuals.

Third,Resource Equity. The inventor’s personal share is generally around 30%, approximately 55% is allocated to various departments and levels of the university, and the remaining 15% is designated as subsequent research funding for the inventor.

In the translation of scientific research achievements, the personnel incentive mechanism is an important link. This“Clear targets, clear methods, and a high ‘give-back’ ratio”regulations, which have fully mobilized the enthusiasm and creativity of Harvard researchers.

The development of any endeavor is a gradual process, particularly in the field of medical innovation and translation. It inevitably requires continuous exploration and experimentation to identify a model for translating scientific research outcomes that best suits one’s own circumstances, through the accumulation of experience over time.

Taking Harvard University as an example, between 2000 and 2004, it ranked only 18th in the United States across innovation metrics such as integrated technology licensing, licensing revenue, and the number of startups founded—far from its position as the world’s top university. It was not until 2014 that Harvard began to lead in this field. From “catcher” to “leader,” Harvard spent a full decade on the path of innovation and translation.

Chinese universities are no exception. At this stage, in addition to clearly identifying their own challenges, they must also accumulate advanced concepts and mature experience from overseas regarding innovation and translation. So, what can we learn?

First, both researchers and university technology transfer offices should fully understand each other’s positions and roles throughout the entire commercialization process.Researchers should establish proper collaborative relationships with universities, rather than treating them merely as service platforms that provide unilateral assistance.

Universities should also “know when to step back” during the process of translating research outcomes into practical applications. When researchers have identified commercial partners and investors through their universities and are ready to engage in deep collaboration with enterprises, the university’s fundamental role in technology transfer has essentially been fulfilled. Timely delegation of authority and reduction of administrative constraints, thereby granting researchers greater autonomy, will better facilitate the successful subsequent commercialization of scientific achievements.

Secondly, through continuous exploration and collaboration, both parties should swiftly identify a commercialization pipeline suited to their own development.Although the desired outcome for all projects involving the translation of scientific achievements is success, the pathways and methods to achieve it vary significantly. Therefore, different collaborative projects require distinct cooperation models, and mutual adjustment and adaptation between researchers and institutions are indispensable steps.

Finally, both parties should establish a strong collaborative relationship, enhance communication and exchange, and jointly build an ecologically balanced ecosystem for the commercialization of research findings.In a sense, researchers and university technology transfer offices are mutually complementary along the chain of scientific achievement commercialization; however, if the relationship is poorly managed, it may devolve into a “lose-lose” situation.

Therefore, both parties should enhance communication in their daily work. Researchers should regularly report their research progress and current pain points to university technology transfer offices. In turn, these offices should engage early, providing support at the earliest stages when researchers need it most. Additionally, university technology transfer offices should remain attentive and promptly address the various challenges researchers encounter during the innovation and commercialization process.