Communications of the ACM
Spinoffs Highlight Importance of Federally Funded University Research
A new report by a coalition of the leading U.S. research universities illustrates one of the many returns on investment of federally funded scientific research: the creation of new companies that bring innovations to market, create new jobs, and contribute to economic growth.
The Science Coalition, representing the top 55 U.S. universities in research activity, asked its member institutions to identify those companies whose very existence grew out of federally-funded research on their respective campuses. The 55 institutions were able to point to 100 companies that trace their origins to basic research funded by the government. Those companies are featured in the report, "Sparking Economic Growth 2.0: Companies Created from Federally Funded Research, Fueling American Innovation and Economic Growth."
According to The Science Coalition, basic scientific research that gives rise to companies like those in its report is in jeopardy. Federal funding for R&D has been on a downward trend for the past decade, with funding levels in 2013 at historic lows. Sequestration, which began last March, is set to run through 2021 and will wring an additional $95 billion from federal R&D budgets over this period. This national disinvestment in science will have real consequences, the coalition says, and as the Sparking Economic Growth 2.0 companies illustrate, research and the transformative discoveries that flow from it require sustained funding over many years to yield results.
"Universities have always welcomed and nurtured innovation. Federal investment in basic research pays dividends every day through the creation of new ways of doing things, new products, new companies, and new jobs," says UIC Chancellor Paula Allen-Meares.
"We are particularly proud of our strong showing in the Science Coalition's list of spin-off companies," Allen-Meares says. "It's a testament to our focus on innovation and business development." UIC ranks 52nd in federal research dollars among U.S. universities, with $249 million in 2011.
Earlier this year, Allen-Meares directed the campus to establish a $10 million fund to move technologies devised by faculty, students, or staff from research to commercial use. The Chancellor's Innovation Fund will make grants totaling $2 million a year for five years. About half the funding will finance proof-of-concept grants of up to $75,000 for projects just emerging from basic research, and the other half will provide equity funding of $150,000 to $250,000 for start-ups that are closer to commercialization.
In August, Allen-Meares was one of 164 university leaders who signed a letter calling on President Obama and Congress to address an "innovation deficit" — a widening gap between U.S. investment in research and higher education and the investment being made by countries such as China and South Korea. The letter reminded the elected leaders that U.S. economic growth since World War II has been driven by technological innovation, overwhelmingly derived from federally funded scientific research.
As the Sparking Economic Growth 2.0 report points out, private industry conducts relatively little basic research today – about 20 percent. Research universities produce the "seed corn" essential to U.S. industry innovation and its ability to compete.
The Sparking Economic Growth 2.0 companies originating from research at UIC are:
- Cell Biologics, founded in 2011, which offers genetically modified and normal mouse cell lines for use in research.
- Cell Habitats Inc., an early-stage biomedical device company developing a micro-device for the natural repair and regeneration of damaged tissue. Its first application will be to restore normal cardiac function after a heart attack.
- EPIR Technologies, founded 1998, which developed basic applications at the heart of night-vision technology and is now applying that technology to next-generation solar panels.
- Immersive Touch, founded 2005, allows surgeons to develop their skills through simulation-based surgery. A library of virtual brains is currently in use in UIC's Clinical Performance Center training neurosurgeons.
- Mobitrac Inc., founded 2001, uses software for the efficient management of vehicle fleets.
- OrthoAccel Technologies Inc., founded in 2007, offers medical devices for improved dental care and orthodontic treatment.
- TeleroGenics, founded in 2007, is developing pharmaceutical treatments for auto-immune disease.
Named a White House "Champion for Change" earlier this year, UIC physics professor Siva Sivananthan established EPIR Technologies to build on his research on technology that transforms light into electricity. EPIR Technologies played an important role in the development of night-vision technology that helps the U.S. military protect against terrorism.
Sivananthan believes that the same technology will make Illinois a major player in the development of solar energy. His original work was supported by grants from the U.S. Department of Defense, the U.S. Department of Energy, and the National Science Foundation.
The UIC College of Business Administration has also played an integral role in fostering commercial success from research innovation. The college's Technology Ventures course, which offers MBA students access to UIC technologies with commercial potential, was crucial to the success of Texas-based OrthoAccel Technologies.
OrthoAccel found its footing as a commercial venture and moved from discovery to marketplace after Jeremy Mao, then-director of UIC's Tissue Engineering Laboratory, acquired the skills and bridges to the Chicago business community that he found through the Technology Ventures course. His discovery that applying certain forces could accelerate bone remodeling and tooth movement is now a medical device, Acceledent, capable of shortening the time it takes to undergo orthodontic treatment.
A database accompanying the new Science Coalition report provides access to company profiles and allows users to sort companies by federal funding agency, university affiliation, type of innovation, and other criteria.
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