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Report says scientific contributions of Local universities measure up
Kauffman Foundation cites economic activity of many researchers.
  •    Rachel Melcer
    st. louis post-dispatch
  • St. Louis Post-Dispatch (MO)
  • June 16, 2006
  • Section: Business
  • Edition: Third Edition
  • Page B1

Critics who say Missouri universities and research centers lag in contributing to the local economy are missing the forest for the trees, according to a recent report by the Ewing Marion Kauffman Foundation.

It is a common misperception, said Lesa Mitchell, the Kansas City-based foundation's vice presi­dent for advancing innovation.

Economists nationwide typically use statistics from a university's technology transfer operation to measure success in turning research discoveries into revenue-generating licenses and startup firms. The data are important and easy to find -- but they miss a lot of economic activity by entrepreneurial scientists who do end runs around tech transfer offices, Mitchell said.

"Economists have viewed innovation simply based upon what is easy to measure. . . . But it's important that the community take a look at the bigger picture," she said. The contribution of St. Louis universities is "phenomenal. . . . There's a lot more going on than everybody thinks there is."

Washington University, in particular, has been criticized for failing to capitalize on its wealth of scientific resources. It received $388 million in federal research grants from the National Institutes of Health in fiscal 2004, ranking fifth among American universities. But that year it created just two startup companies and executed 65 licenses or options on technology, lagging the other top grant recipients, according to data from the Association of University Technology Managers.

Those numbers, however, don't account for companies formed without assistance from tech transfer offices, or products created through consulting arrangements between researchers and commercial operations, according to a study prepared for the Kauffman Foundation by David Audretsch and others at the Entrepreneurship, Growth and Public Policy division of the Max Planck Institute of Economics in Germany.

Audretsch tracked 1,693 scientists at U.S. universities, those who received the top 20 percent of National Cancer Institute grants. He found that more than one-fourth of those who were awarded patents also said they started their own businesses -- a much higher rate than indicated by commonly used statistics.

"Publicly accessible databases . . . represent, at best, the tip of the iceberg of commercialization activities by NCI scientists," the report said. "Scientist entrepreneurship appears to be the sleeping giant of the commercialization of university research."

Universities typically own discoveries made by faculty in campus labs. Even the inventor must license the technology through the university's technology transfer operation in order to commercialize it.

But these offices typically are understaffed and lack resources. They may become a bottleneck, obstructing rather than encouraging the creation of new companies or licensing of valuable technology.

But there are ways around that process.

In some cases, a university may decide it is not interested in a particular discovery and release it to the researcher. Other technologies, such as those that came out of the human genome sequencing project completed in part at Washington University, automatically are made part of the public domain. And some discoveries involve processes or products that are not patented. All of these can be commercialized directly by the inventor.

In St. Louis, the vast majority of startups that have occupied two biotech business incubators -- the Nidus Center for Scientific Enterprise and the Center for Emerging Technologies -- were formed without direct involvement by tech transfer offices. Yet, many of these firms collaborate with university researchers, or include them on scientific advisory boards. Some startups were created or staffed by university graduates, who benefit from their professors' teaching.

This "knowledge spillover" may be a school's most important economic contribution, Mitchell said.

Wayne Barnes, an associate professor of biochemistry and molecular biophysics at Washington University School of Medicine, said he created a company out of technology that the university didn't want. DNA Polymerase Technology Inc., which sells enzymes used in genetic tests, has received more than $1 million in federal research grants and turned a profit.

Barnes bought a building on South Grand Boulevard to house DNA Polymerase, dubbed it the Inventery and began renting space to other startups as a commercial incubator. His company's researchers are able to share ideas and resources with those at tenant firms Luminomics Inc. and Rapid Scientific Inc.

Barnes said he is a reluctant entrepreneur. He was frustrated that the university chose not to commercialize his discovery and said, "I just felt I had to do it rather than let the opportunity die."

That is a common sentiment, according to Audretsch's report: Scientists who lack university support are much more likely to create their own companies, while those who receive tech transfer help more commonly license their discoveries to existing firms.

In both cases, it is important that scientists form social networks and connections to the corporate world, investors and other entrepreneurs, the report said.

These networks exist in St. Louis through incubators, venture capital and civic organizations, and links among science and business schools. The leaders of these groups are connected, said Marcia Mellitz, president of the Center for Emerging Technologies, but more effort is needed to include lab researchers.

Washington University Chancellor Mark Wrighton said he encourages scientists to get involved. At a recent Foundation for Innovation symposium, sponsored by the university, he said its goal is to "as rapidly as possible, move the results of research into the hands of people who can use it" to help society. While the university's primary goal is basic research, and not making money, its people and students should contribute useful discoveries that can help the economy, he said.

One way universities contribute is by recruiting star researchers, Mitchell said. These top-notch scientists typically come with some funding as well as business networks, established in other places they have worked, that can help with new ventures.

They also can connect with local resources such as the BioGenerator, an organization that seeks out promising technology at research centers and funds early work to determine its commercial viability. These initial proof-of-concept tests or marketing studies can be conducted before a company is formed and a technology transfer office becomes involved, said BioGenerator Chief Executive Ken Janoski.

Taking this type of early look at as many different concepts as possible is key to ramping up commercialization and company formation, Mitchell said.

"We've gotten too tied up in the role of the technology transfer office as a central theme," she said. "We really need to focus on the faculty."

PHOTO - Technician Lyubka Kirilova (left) and researcher Milko Kermekchiev work on a project on the use of mutant enzymes in human blood to do DNA analysis. They work in a lab in a building called the Inventery, which is owned by Wayne Barnes and offers space for biotech startups. Photo by Kevin Manning Post-Dispatch

PHOTO - Wayne Barnes, a biochemistry and biophysics professor at Washington University, examines a slide after washing away the results of a failed experiment into a new way of DNA sequencing.

Photo by Kevin Manning Post-Dispatch

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