The University of Virginia’s provost, Tom Katsouleas, once told me that by his estimates, less than 1 percent of basic research is commercialised and that there may be as few as one near-term commercialisation for every $10 million (Rs.65 crore) invested in fundamental research. This is an awful waste, especially when America is undergoing a reinvention in which entire industries are being wiped out and new ones created.
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A broad range of technologies is now advancing at exponential rates and converging, impacting entire industries. When computing, telecommunications and consumer electronics converge for example, we get smartphones, smart TVs, and augmented-reality systems. Computing, medicine, and sensors join to produce wearable medical devices such as the Apple Watch which will transform healthcare and Apple Research Kit, which will revolutionalise clinical trials. Uber has already disrupted the transportation industry with its GPS-based cellphone apps; Netflix has made mail-order DVD rentals obsolete with its use of storage and networks; and WhatsApp has decimated the SMS revenues of telecom providers with its mobile-data technologies.
Few, if any, corporate executives have any idea of what to do to survive this tsunami of technology convergence. Even the innovation models they were trained on, such as Clayton Christensen’s The Innovator’s Dilemma, have become defunct. The competition no longer comes from within an industry; it comes from elsewhere, and not having domain experts in fields such as synthetic biology, nanotechnology and robotics, most companies have no idea how to respond to these new threats.
Universities, though, do have experts. As a result of decades of government investment in basic research — in fields such as computing, medicine, sensors, artificial intelligence, digital manufacturing, robotics, nanomaterials, and synthetic biology — they have an abundance of talent and intellectual property. This is a gold mine for industry. Businesses that are under siege or are trying to expand into new markets usually look to buy start-ups or form partnerships with research universities. And some simply take what they need. After all what better place to acquire intellectual property and talent than the universities?
Uber wanted to urgently build self-driving cars, so it lured away more than 40 researchers from Carnegie Mellon University in January this year. Being nice or ethical didn’t matter to Uber; it took what it wanted and then came back to the university with a relatively small consolation prize: $5.5 million (Rs.36 crore) for a robotics faculty chair and three fellowships. Apple was found guilty of incorporating unlicensed microchip technology from the University of Wisconsin-Madison into its iPhones and iPads — and was ordered to pay more than $234 million (Rs.1,530 crore) in damages. We will see much more of this in the next few years. If universities don’t cooperate, businesses will take whatever they can get — because they are desperate. In order to retain its researchers, academia will need to put aside its historical aversion to working with industry.
Universities are better off forming industry partnerships to jointly develop technology, as Stanford and MIT have done by accepting $50 million from Toyota for research in artificial intelligence and autonomous-driving technology. Several months after being raided by Uber, Carnegie Mellon University also agreed to partner with Google to turn its campus into a living laboratory for internet-connected sensors and gadgets. Companies such as Toyota have been blindsided by technologies emerging from other industries, and visionaries such as Google have realised they can’t do everything on their own. So this is a win-win strategy.
A huge opportunity exists to teach businesses about emerging technologies and have them fund research-commercialisation efforts — if universities seriously rethink their traditional ideals of academic freedom and sanctity of the industry-academia division. Such partnerships can make up for declining government funding of academic research. And it doesn’t have to be a Faustian bargain. Both partners can benefit if partnerships are structured in a meaningful way, as is the partnership between Google and Carnegie Mellon. After all, Google didn’t hire away university researchers; it funded research and testing on campus.
Stanford University figured this out long ago. (Disclosure: I am a fellow at Stanford’s Rock Center for Corporate Governance.) Its faculty members are encouraged to work closely with industry, and these collaborations have led to innovation on a grand scale in Silicon Valley, with the formation of companies such as Google, Hewlett-Packard, and Cisco Systems. This, in turn, has led to an endowment of over $20 billion (Rs.130,810 crore) through donations that its billionaire alumni have given to Stanford.
(Vivek Wadhwa is director of research at Duke University’s Pratt School of Engineering and vice president of academics, Singularity University, USA)