An Alternative View of scaling up regional knowledge transfer output

We are all familiar with the traditional “ funnel” model of technology transfer. On paper, this model looks deceptively simple. The funnel starts with identifying as many inventions and technologies as possible, securing them means of patenting and then licensing them out to existing companies, or even better, new spin-off companies.

This simplistic technology push model still forms the basis of many regional development and innovation programmes throughout Europe. Many regional policy makers consider inventions, patents and especially spin-offs the essential contributions of universities in any regional economic development program.

The funnel paradigm implies that if you throw in as many projects into the funnel a certain number successful spin-off companies will come out at the other end. The same policy makers are using this quantitative approach on innovation and urge universities to produce as many spin-offs as possible. If you set up many spin-off companies, ultimately and inevitably one of these spin-offs will be the next Google or Facebook. The adagium seems the more the better and quantity over quality.

Experienced Knowledge Transfer (“KT”) practitioners know that chance does indeed play a role, but it is quality that ultimately leads to success. We know that all KT projects are “heavy lifting”. KT is a highly resource intensive practice.

Even worse, the funnel model is not very scalable. Most TTO’s have a reasonable scouting practice and do identify most of the patentable inventions. Doubling or tripling input is simply not realistic. That can only be achieved by substantially reducing the quality threshold. Should one patent mediocre technologies? I think not.

Scaling output by improving the throughput process is possible, but, as said earlier, KT is a resource intensive practice. So in order to increase throughput one has to increase resources: KT people and KT tools. Economies of scale could apply, but merging TTO’s is not a trivial matter (as I can testify from my own experience at my own TTO).

So how can one scale regional KT output without lowering the quality standard and/or increasing KT resources?

The answer is quite simple. One needs to redefine output. The output of KT should not be patents, licenses and spin-offs but “economic impact”. Yes, I know, it should be “societal impact”, but believe me, regional policy makers are only interested in economic impact.

Economic impact is (1.) jobs and (2.) business (euros). So the challenge is how to scale up jobs and business by means of knowledge transfer. Luckily, KT practice is more than just licensing and spin-off.

KT encompasses other activities that are much more scalable. The first is research collaborations. Any researcher or research group can collaborate with companies. I am convinced that in most universities, there is a vast untapped potential of researchers that do not (yet) collaborate with the private sector. In principle however, any researcher can (and should) collaborate with the private sector. Collaboration is a scalable KT category.

KT also encompasses another and perhaps more mundane and often overlooked category: post-academic education. This is nevertheless knowledge transfer in its purest form. It’s a regional activity (almost) by definition. On top of that, post-academic education is a perfect SME proposition, a proposition that is most welcome because universities find it hard to collaborate with SMEs on research.

Research collaboration and post-academic education are KT activities with the highest potential for scale up. Do they also deliver the same economic impact as licensing and spin-offs?

One study by Biggar Economics[2], a specialised consultancy firm, on the regional economic impact of four universities in Amsterdam suggests that research collaborations and post-academic education are already the largest categories in economic value add and are also more scalable than spin-off and licensing activities.

Similarly, if one looks at the impact on labour of the four KT categories, one can conclude that the amount of jobs created per million euro Gross Value Add is more or less comparable.

This may seem counter-intuitive, as spin-offs are considered to be the principle generator of high skilled jobs. The economic model used by Biggar Economics, which they claim is scientifically validated, does not assent this notion.

I hope this alternative view on scaling up regional economic impact may help you alleviate the preoccupation of local policy makers on spin-off creation and enable you to develop a more realistic and impactful economic development strategy in your region.