What are the business benefits of university technology transfer?

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Worth billions today, Facebook was founded by Mark Zuckerberg along with his college roommate and fellow Harvard University student Eduardo Saverin.

By U2B Staff 

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Universities and research institutions have always been the world’s engine rooms for innovation.

As society’s greatest conduit for developments in virtually any sector, a simple idea sparked within its four walls could very well become the next life-changing invention.

In fact, some of the world’s greatest inventions were products of university research. And it’s more than just the Internet, Google and Facebook, revolutionary though these undoubtedly were.

Other university-rooted inventions also deserving of mention include everyday essentials like the fluoride toothpaste, seatbelts, spreadsheets, as well as life-saving medical discoveries from insulin for diabetes to antibiotics for tuberculosis and many of the chemotherapy drugs used on cancer patients today.


Whether they were to expand human knowledge in new areas, improve efficiencies or treat life-threatening diseases, there’s no doubt that advancements born of research collaborations between academia and corporations have contributed greatly to the global technological revolution of today.

And as the world leapfrogs into the era of Industry 4.0, there’s no better time for businesses small or large to push harder into this space. To better navigate a future world of work where machines and automation will replace much of today’s human tasks, collaborating with academia is key.

If your business is keen on growing in a highly competitive and tech-driven market, securing a university research partnership could prove a winning strategy. On top of access to some of the world’s greatest minds, a university collaboration also means a chance to make full use of the institution’s state-of-the-art facilities and possible funding support, all of which helps keep overheads low and offers the opportunity to emerge a market leader quickly.

There are various ways in which businesses interact with universities, including through collaborative research, academic consulting, licensing of technology/intellectual property (IP), testing and analytical services, executive education or training, through student start-ups and university spin-outs, among others.

How these partnerships are formed, defined and managed vary from university to university so before you lead your business into any kind of partnership with academia, first decide exactly what you want out of the relationship.

For the purpose of this article, we’ve compiled information to help you better understand licensing technologies via technology transfer, a process that brings both business and university equal benefit.

What exactly is technology transfer?

Ideas are born all the time. But developing that idea into a tangible, marketable product takes time, money and resources.

Technology transfer allows that to happen. It involves first identifying a promising intellectual property (IP) from a scientific finding and then guiding it into the commercial marketplace through licensing deals and industry partnerships.

In a university, the process is managed by its respective Technology Transfer Office (TTO).

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Technology transfer helps turn an idea into a marketable product. Like this robot. Source: Andy KellyUnsplash

What are the steps involved?

An inventor who has created or built something with significant value or that solves a significant problem first needs to file an official invention disclosure to the university TTO or a TLO (Technology Licensing Officer) within the office.

The TLO then reviews this disclosure, conducting patent searches where applicable and analyzing the market as well as its competition to determine the invention’s commercialisation potential.

Typically, this evaluation will help the TTO determine the best commercialisation strategy; ie. whether to focus on licensing the technology to a specific company for further advancements or by creating a new business start-up.

Next up: patenting. Patenting gives the patent holder the right to exclude others from using or selling the innovation, among other things. This is extremely valuable for commercialisation partners as it protects their investment in the product.

The TTO then proceeds to market the invention. This is the process of identifying commercialisation partners; companies with the right expertise, resources and business networks necessary to develop and introduce the product into the commercial marketplace typically make the cut.

Often, TTOs would use this opportunity to exploit the university’s relationships with existing industry partners. Alternatively, the inventors – students or faculty – could leverage their relationships with industry experts or technology entrepreneurs to advance the process. This is highly encouraged; according to the Massachusetts Institute of Technology (MIT), this dramatically enhances the process.

How does technology get transferred?

This is done through a licensing agreement.

The university retains ownership of the intellectual property but the industrial or commercialisation partner receives nonexclusive, partially exclusive or exclusive rights to use and develop the technology.

Depending on the terms of the contract, the licensee will be expected to satisfy several conditions such as creating a satisfactory development plan, commercialising the invention within a set period of time, as well as making financial payments to the university.

Occasionally, TTOs would draw up an option agreement whereby a third party would be permitted to evaluate the technology’s marketing potential before licensing. During this period, the option holder would be responsible for payment of patent costs.

Once licensing is done, the product moves into development stage. Licensed partners are then, within stipulations in their agreements, expected to advance the technology with or without the involvement of the inventor. This will depend on both the inventor and the licensee’s interest in using the former’s expertise during the development phase.

So what are the benefits of technology transfer to businesses?

As we wrote earlier, collaborations between university and business are always twofold.  This could not be more true of the technology transfer process.

“Technology transfer helps develop early-stage intellectual property into tools for direct use by the research community, or into bases for new platforms, products, or services to be made into products for public use,” UNeMed, the technology transfer and commercialisation office for the University of Nebraska Medical Center, points out.

When a successful transfer takes place, both partners benefit. On the one hand, the university is able to retain IP rights of the technology. Revenue generated through licensing revenue would also be poured back into the institution for research and education.

For businesses, licensing technology from a university helps them in a variety of ways, including getting a leg up on competitors in the market, reducing research and development costs and gaining greater speed to market.

Additionally, these partnerships help establish long-term and valuable partnerships with university, which they could leverage for future opportunities.