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Tech transfer today: fewer government dollars, more corporate funding

Historically and to this day, the federal government has been the biggest supporter of university research. But now, universities are getting more comfortable with the idea of partnering with corporations in large part because they don't have a choice.

The University City Science Center has been the headquarters of several startups spun out of Penn.

With fewer government dollars for research, universities like Penn and Princeton are hustling to keep their research funded. They’re turning to the corporate world to find financial support for their research, said tech transfer officials from Penn and Princeton.

“We love sponsored research,” said Laurie Tzodikov, senior licensing associate at Princeton’s Office of Technology Licensing. Princeton also recently launched a matching fund program where the school partners with a corporation and matches the amount of funds it provides for a research project.

It’s one way that tech transfer is changing, said Tzodikov and Penn tech transfer head John Swartley at a panel at last week’s IMPACT conference. Historically and to this day, the federal government has been the biggest supporter of university research. The idea is that, in turn, universities have a responsibility to the public: they aim to bring their research to market so it can benefit the taxpayers that funded the research in the first place.

But now, universities are getting more comfortable with the idea of partnering with corporations in large part because they don’t have a choice, said Swartley, who was named head of tech transfer this past summer and has a background in venture capital. It’s what he called the “silver lining” to the decrease of government funds for university research. If university research gets more “privatized,” so to speak, it’s not clear what it would mean in terms of getting products to market to benefit the public.

Traditionally, universities steered clear of partnering with the corporate world to “preserve the integrity” of their research, Swartley said. The idea was that universities weren’t meant to be profit-driven. That’s fair, he said, but without the private sector, university inventions won’t get to market.

Schools are also developing their own funds, but not necessarily for-profit funds.

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For-profit funds don’t make sense for companies at this early of a stage,  said Mike Poisel, director of Penn’s UPstart program, which works to launch Penn spinout companies. It would be “unrealistic” to expect to get a return on investment on these spinout companies, he said.

But, Poisel said, Penn is considering developing a $25 million fund with alumni money. The money that gets returned from exits would go back into the fund and get redistributed again.

Princeton has two funds to back research.

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