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“Technology transfer”: what it means and why it’s important for innovation

It’s one of the pillars at the heart of the open innovation. It’s good both for grown-up businesses and young startups. Everything you need to know about technology transfer, its key players, its role in the economic and innovation system

09 Nov 2018

We’ve been talking about technology transfer for several years now, but never before has the subject become as crucial as it has been in recent years. Technology transfer has become one of the pillars of innovation and open innovation with the acceleration of the digital economy and the digital industry.

What exactly does it mean? 

Technology transfer covers all those activities that underpin the transition of a range of factors (including knowledge, technology, skills, manufacturing methods, production samples and services) from scientific research to the markets.

This process is the result of a partnership between academic and industrial fields, whose main purpose is to make technology accessible to everyone. Technology transfer can also be defined as a process characterised by a starting point (research), an end point (the market) and a series of middle phases (the so-called supply chain), involving several players.

Given that technology – materialization in other words – is the most tangible embodiment of an idea or a theory, to fully understand the concept of technology transfer the definition of intellectual property must be taken as the outset. Intellectual property is a set of laws enshrined to protect the creativity of human intelligence and thus give appropriate incentives to those who engage in research or creation.

In addition to being a sort of guarantee for all those who create innovation within the research environment, intellectual property essentially plays a connecting role with the business and production sides. For the latter, then, is one of the most effective tools to keep the advantage over competitors, positions achieved through the innovative effort. Accordingly, intellectual property makes technology transfer safer and more efficient, thus encouraging the exploitation of innovation by existing or newly established companies (spin-offs and start-ups).

From a regulatory point of view, although the legal framework relating to the “protection of ideas” is the result of a series of international agreements, in Italy an important source is the Industrial Property Code, adopted by Legislative Decree no. 30 dated February 10th, 2005.  Without delving into too much details, it makes a significant separation between industrial property (i.e. intellectual property protected by patents) and intellectual property (i.e. literary and artistic works protected by copyright).

Who gives birth to ideas? 

In general, the circuits of public research are, for the time being, the most important repositories of cutting-edge ideas; indeed, thanks to the results of academic research, important results for the whole of humanity are not uncommon. On the other hand, scientific and technological research, whatever its field of application, is a joint activity made up of individuals who share their knowledge in order to make progress towards the frontiers of human knowledge.

This activity is an integral part of the so-called innovation life cycle. Characterized by a rather complex supply chain and represented by a series of activities that bring knowledge from research to the market. In this passage, an important role is played by all those players involved in the process of technology transfer.

Who are the key players in the technology transfer system? 

Research institutions

The creation of an idea (or an intellectual property) and the subsequent phase of technology transfer, as we have said, are rather complex processes. It includes a certain number of subjects, forming a genuine supply chain. In this regard, the relevant literature seeks to subdivide the players in this supply chain into categories and roles, also adding the contribution of the so-called transfer support services.

The first part of the technology transfer path is taken up by the research institutions. It is about those engaged in research and development on a daily basis. Within these institutions (public universities are an example, but not the only one) different categories of people are involved, often classified in relation to the employment contract entered into with the same institution. This means: employees, researchers, project collaborators, PhD students, but also students working on their thesis.

All these subjects can be the authors of an innovative idea. They can also be inventors, more romantically. For this reason, the most significant problem for each of them is the possibility that the intellectual property generated therein will be adequately protected. Furthermore, for a variety of reasons, the rules at legislative level do not specify who the research results belong to, for all those who do not fall within the category of employees of research institutions.

Companies

Companies are other relevant players in the technology transfer process. As a matter of fact, they carry out in-house research activities, even if very different from those carried out by “research institutions”. Often the mechanism is a partnership with other companies or research institutions. In the meanwhile, companies can finance research projects, for example by implementing open innovation paths, i.e. by going beyond the company perimeter to look for the technological innovation they need. In addition, companies are the main purchasers of technology derived from public entities. For all these reasons, these are essential for the successful implementation of technology transfer processes.

Funders

The third link in the chain, the funders, are also essential. Research activities may be carried out with the research organisation’s own resources or with external ones. In the latter case, the funders can be either public (mainly through tenders) or private (companies, banks, funds, business angels). In the area of public funding, among others, European funding has become increasingly important in recent years. Specifically, one of the most relevant programmes is Horizon2020. It should be noted that both public and private funders are interested in intellectual property both in the ownership and in the application of the idea.

TTOs – Technology Transfer Offices 

To support the activities of the main players in the transfer process, a series of subjects which could be defined as “complementary” have been established over time. Among the most popular there are the “Technology Transfer Offices“, also known as TTOs. Regardless of how they have been created (this process may be different), their mission is to promote technology transfer.

How? Through a range of activities: first of all supporting researchers in positioning research programmes; but also collecting and evaluating communications related to inventions; or adopting the most suitable protection methods, in addition to commercialising intellectual property towards existing companies or through the creation of new ones (spin-offs).

In other words, TTOs represent a sort of transmission channel between the research and market environments. On the contrary, in some cases, also contribute to give research institutions trends and indications arising from the same market, playing the role of advisers to support the top management of research institutions, as regards relationships with companies.

Some initiatives by Mise (Ministry of Economic Development) are also aimed at strengthening the Technology Transfer Offices. One of the latest cases in this regard is the launch in May 2018 of the call for proposals for the provision of financial resources to support TTOs. In detail, the Ministry made available 3 million euros (2.5 million for refinancing projects already in progress – funded through a call for proposals dating back to July 2015 – and 500 thousand for new ones) to support initiatives of strengthening and capacity buiding of TTOs.

Why it’s necessary for enterprises and startups

Those working in the innovation sector are used to wondering: is technology transfer open innovation? Is it necessary or not, in essence, for companies to intercept the innovation that comes from outside? An answer to these questions have been attempted by the authors of the book “Open innovation essentials for Small e Medium Enterprise”. A book where technology transfer is identified as an open innovation methodology, or rather as a part of a wider process that also includes initiatives such as crowdfunding or scouting.

According to the authors (Luca Escoffier, Adriano La Vopa, Phyllis Speser, Daniel Satinsky) too often we hear about technology transfer as a process belonging to universities and research centres, but actually a technology can be transferred from an industrial sector to another and therefore also from a company to another. From this viewpoint, therefore, technology transfer is part of the concept of an open approach. It should not be forgotten, however, that the process of technology transfer is not limited to the mere search for technology.

Once the technology to be “carried on board” has been identified, a process consisting of several layers is created for the company. What are these phases? First of all, the identification of a scalable business model, combined with a “revenue model”. The sales (or licensing) model of the patent is another relevant aspect of this process. The next step is the implementation of the technology, i.e. the introduction of the new product into production. Not to mention profit management.

According to the authors, the best way to allow a company to make open innovation, using technology transfer, is through cultural change. In other words, in order to innovate, it is necessary to be open to innovation, namely to be able to go beyond one’s own limits, always looking for new sources of innovation, not always conventional.

Like the startup business approach. Even in small innovative companies, technology transfer can be functional to the business. Specifically, it can speed up the “scaleup” process and facilitate the dynamics of internationalization.

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