By Catherine Jewell, Information and Digital Outreach Division, WIPO
Public research systems play a huge role in generating new knowledge and enabling its real-world application. For decades, countries around the world have been implementing policies to improve the efficiency of knowledge transfer from public research to the market to boost economic growth and address real-world challenges.
An international assessment of knowledge transfer policies, published
by Cambridge University Press, examines the experiences of six
countries in the area of technology transfer and sheds light on gaps in
our understanding of the policy options that work and those that work
less well.
Anthony Arundel, co-author of Harnessing public research for innovation in the 21st Century: An international assessment of knowledge transfer policies, published by Cambridge University Press, discusses the main gaps in our understanding of how knowledge transfer works and key considerations for policymakers in crafting effective knowledge transfer policies for the future.
What is the aim of your book?
Countries have implemented strategies to increase the commercialization of public research to support economic growth for years. Yet, the commercial potential of a great deal of knowledge and expertise in the public research system in many countries remains untapped.
Since the 1990s, many countries have migrated towards a so-called "IP licensing model," where the public research sector generates new knowledge, patents it and then licenses it to businesses or government agencies.
We examine the experiences of three high-income economies: Germany, the Republic of Korea and the UK; and three middle-income economies: Brazil, China, and South Africa.
The history and policy challenges of these countries is of real interest. They all migrated towards an IP licensing model, yet came up with a variety of policies and practices for knowledge transfer to adapt to the numerous contextual conditions that influenced outcomes. They each have different industrial structures and levels of technological competence within their public research and business sectors. And they have all undergone major changes in their national policies in recent decades to improve knowledge transfer and commercialization.
Our analysis sheds light on gaps in our understanding of the policy options that work and those that work less well.
Can you say a few words about knowledge transfer and the role of public research in innovation ecosystems?
Knowledge transfer, in general, involves getting knowledge that is produced in the public research system into firms, government agencies, and even households, for them to use in socially or economically useful ways.
The public research system, which includes both universities and public research institutes, has always been essential for all countries. Historically, it has been a major producer of new knowledge, which firms have then taken up and commercialized.
The commercial potential of a great deal of knowledge and expertise in the public research system in many countries remains untapped.
The public research system has three main roles that are supported by government policy. First, to train and educate students, second to push the frontiers of knowledge through cutting-edge research, and third to support economic activity by transferring knowledge to the real world. The latter role has gained importance in recent years.
Within the public research system, universities typically focus on basic research and public research institutes focus on applied knowledge. But there are many different models globally to meet these two functions.
What are the potential benefits of knowledge transfer?
They are immense. So much of what we do in health, ICT, and mechanical engineering can be traced back to public research and is based on knowledge transfer.
Modern technological advances are increasingly science-based, and the public research system plays a central role in discovering new technology and training students about it.
Firms depend on these contributions to produce marketable innovations. That is why the interaction between the public research system and business is pivotal.
Has the COVID-19 pandemic highlighted the need for knowledge transfer?
Knowledge transfer has always been a global issue, because all countries, with the possible exception of China and the USA, are dependent on drawing knowledge from elsewhere. The pandemic has highlighted the gap between knowledge and capabilities and the need for increased sharing of both between countries. While many countries, even high-income countries like Australia, have research scientists working on mRNA, very few have applied that knowledge to produce vaccines, in part because they lack specialized knowledge and expertise to do so. It is a global imperative that knowledge and expertise are more widely available, particularly in low- and middle-income countries.
Knowledge transfer is often a two-way street. Universities and public research institutes can learn a lot from engaging in research contracts and collaborations with firms.
What are the main channels for knowledge transfer?
Knowledge transfer takes place through informal channels, often referred to as "open science": reading the literature, attending conferences, hiring trained graduates and personal contacts; and through formal channels: intellectual property (IP) licensing, collaboration and research agreements and contracting-out.
Knowledge can be transferred entirely through informal or formal channels, or through a combination of both; for example, when information discussions lead to an IP license.
Knowledge transfer is often a two-way street. Universities and public research institutes can learn a lot from engaging in research contracts and collaborations with firms.
What factors influence the effectiveness of knowledge transfer?
Public research is of enormous value to any firm or organization producing something of economic or social value. But a firm has to already have the capabilities to take advantage of public research. This is an important consideration for policymakers.
The R&D intensity of a firm tends to increase its willingness to engage with the public research system. And the number of universities in a given region, and their ability to respond to the needs of firms, also have a positive influence on such engagement.
The experiences of Germany, and more recently China, highlight the benefits that can flow from research collaborations and contracts in terms of improving the technical capabilities of firms to use new knowledge.
What role does IP play in facilitating knowledge transfer?
IP can play an important role. But IP is primarily an appropriation mechanism that prevents an invention from being copied. It is not a knowledge transfer mechanism, as such. IP is only required for knowledge transfer when a technology is expensive to develop and eminently copiable. When these two conditions occur, businesses will typically not invest in developing knowledge to a commercially viable state without an exclusive license (or patent) that prevents competitors from copying it. Second, companies may only agree to invest in contract or collaborative research with a university to solve a problem if they can acquire some of the resulting IP. In this case, IP can support research investment.
IP can be a good earner for a small number of universities. For example, Stanford University earned USD 254 million (90 percent came from royalties on product sales) from the Cohen-Boyer patent (1980-1997) for recombinant DNA, which started the whole biotech revolution. The patent was licensed to 468 companies and used in 2,400 products. An exclusive license was not required for this knowledge to be used.
But research shows that university revenues from contract research far outweigh those from IP licensing. For example, in 2015-16, all universities in the UK combined earned GBP 4.2 billion from all knowledge transfer activities, of which just GBP 176 million (4.2 percent) resulted from IP licensing. This suggests that IP could play a more important role in enabling knowledge transfer through encouraging contract research and collaboration than it does through IP licensing.
In some countries, IP licensing revenues generated by universities may determine access to additional funding. In the UK, for example, universities that perform well in IP licensing can attract up to 7 percent more funding than those that do not. Elsewhere, IP licensing performance doesn't affect funding but does enhance a university's ability to attract star scientists.
In July 2021, ahead of the launch of Harnessing public research for innovation in the 21st Century: An international assessment of knowledge transfer policies, WIPO, in collaboration with AUTM, the world's leading technology licensing association, the International Chamber of Commerce (ICC) and the Licensing Executives Society International (LESI), held an international seminar to discuss how to more effectively advance technology/knowledge transfer from public research to the market.
The organizations share common goals related to the use and transfer of knowledge and IP globally. Based on this understanding, together they agreed to consider enhanced cooperation in two priority areas:
- Metrics: To examine ways to track technology/knowledge transfer activities in a more standardized, internationally comparable way by exploring common definitions, improved surveys, and by sharing, as appropriate, data.
- Policy: To contribute to the dialogue on what technology/knowledge transfer practices and policies work best (and don't work), and to propose policy actions - through publications, task forces, and/or best-practice sharing platforms - paying particular attention to the needs of small-and-medium enterprises (SMEs) as key stakeholders.
Isn't the patent disclosure a form of knowledge transfer?
Yes, there is a disclosure of the knowledge through the patent system and that is important, but surveys show that very few companies report this as an important source of knowledge. For example, the European Community Innovation Surveys find that less than 10 percent of firms cite patent disclosure as a source of knowledge, though firms in specific sectors, such as biotech, do track patent data. However, an important motivation for this is to monitor the state of the art for their own patent applications. The role of patent disclosures in advancing knowledge is a grey area that needs additional research.
Is a strong focus on IP licensing a positive or a negative?
It is most likely neutral. It may re-orient some types of basic research towards applied research, but that is not necessarily harmful. The bigger problem is the overriding policy focus on IP, which suggests that other forms of knowledge transfer aren’t as important.
To date, research on knowledge transfer has been dominated by IP data, and understandably so, because these data are readily available. We're amazingly ignorant about the mechanics of other forms of knowledge transfer, both formal and informal.
What can be done to improve the situation?
There is no one recipe for success for effective knowledge transfer.
We know that a firm's capabilities can improve when it funds contract research from a university, hires a PhD student to work on a project or engages in a research collaboration, through which it may or may not acquire patents. But we need to better understand how informal and formal knowledge transfer channels interact to create an ecosystem where knowledge is produced and commercialized. We know all the parts exist, but we don’t really know what the optimal policies might be to support the process and how policies need to adapt to different contexts.
We need better metrics. Most countries do not collect consistent and comparable metrics for knowledge transfer. The development of good policies to support knowledge transfer requires a comprehensive set of metrics that cover the full range of knowledge transfer mechanisms and policies at the institutional level. A situation where we only have metrics for IP and IP licensing is insufficient.
We need metrics for financial and non-financial incentives that encourage and enable academics to assist firms in using new knowledge; for income earned from contract research, and for income from different types of research collaboration, particularly with firms. These metrics would help define the different roles that IP can play and where IP is not required for effective knowledge transfer.
What are some of the key barriers to effective knowledge transfer?
Under all circumstances and in all countries, knowledge transfer occurs, but effective knowledge transfer takes us back to the nexus between the capabilities of the university and the capabilities of the firms. Effective knowledge transfer hinges on capable firms and interested academics.
Too often, there is an assumption that firms are capable of absorbing and commercializing knowledge produced by universities. But that is not necessarily the case. In many low and middle-income countries, there may be no domestic firms capable of using university discoveries. Conversely, universities may not be working at a high enough level to produce value for firms.
Firms are a critically important part of the equation in all countries, but for middle-income countries, it's crucial that policy makers improve the innovation and knowledge capabilities of local firms.
What can universities do to improve knowledge transfer?
Universities can take steps to motivate and enable academics to work with firms. And their knowledge transfer offices can link academics with firms and vice versa to optimize opportunities for knowledge transfer.
Do governments need to look beyond IP-based knowledge transfer policies?
Yes. IP is the tip of the iceberg. The IP licensing model is a very small part of knowledge transfer. IP is not a silver bullet, but it can encourage firms to invest in university research and is necessary for knowledge transfer under some conditions – for instance, when an exclusive license is required.
Effective knowledge transfer hinges on capable firms and interested academics.
What are your key takeaways?
First, knowledge transfer is an integral part of an innovation system. You can’t divide it into its separate parts.
Second, policies for effective knowledge transfer need to ensure knowledge transfer systems simultaneously support and improve the capabilities of both universities and firms.
Third, IP can provide an incentive for both firms and academics to participate in collaborative or contract research.
Fourth, we can’t rely on IP licensing as a major source of research funding. That would be a terrible mistake.
