|Award Category:||Innovation and Entrepreneurship|
|Submitted By:||Innovation Works, Inc.|
Innovation Works’ (IW) Research Commercialization Program is a collection of initiatives that utilizes university partnerships to facilitate the commercialization of innovative technologies and promote the creation of high-growth-potential companies in southwestern Pennsylvania. The program provides funding and strategic business support to help determine the commercial potential of university innovations; helps rapidly transform very early-stage startups into revenue-positive companies through the application of innovative business growth strategies; and provides assistance to entrepreneurs working outside of the university setting to help them overcome commercialization challenges. Since program inception, IW has awarded 93 translational research grants totaling over $1.4 million and has provided investment, mentorship, and business support services to 64 entrepreneurial teams working to commercialize technologies, 40 of which formed companies through the investment process. In total, teams supported through the Research Commercialization Program have created more than 150 jobs, launched over 70 products, and attracted in excess of $110 million in follow-on funding, making it the most successful program of its type in the region and one of the most impactful in the U.S. Finally, this program is highly scalable, having already been adapted outside Innovation Works for use in other research institutions and by economic development organizations in partnership with universities in several innovation hubs throughout the U.S.
Southwestern Pennsylvania is home to several prominent universities and research institutions that, combined, attract over $1 billion annually from federal sources to support research that leads to cutting-edge innovations. In the last 10 years alone, two of these institutions, Carnegie Mellon University and the University of Pittsburgh, have been awarded over 17,500 research grants and have registered nearly 1,000 patents. A third regional institution, Duquesne University, has been actively expanding its technology commercialization efforts, aiming to increase its research output and licensing revenues to competitive levels. Despite this high volume of intellectual property creation, university technology transfer offices historically have lacked the resources required to fully support the commercialization efforts necessary to draw the greatest economic value from these innovations. Systematic factors are the primary impediment to success. Federal research dollars fund research but are largely prohibited from being used to support market validation and commercialization efforts. Additionally, university technology transfer offices do not have an inherent mission of localized economic development, requiring targeted coordination from regional support organizations.
As southwestern Pennsylvania’s most active investor in early stage, high-growth-potential technology companies and an integral member of the region’s economic development community, Innovation Works recognized that a need for assistance existed among universities, and the organization developed a suite of programs to provide business-growth and commercialization strategies to university technology transfer offices and affiliated entrepreneurs, with the goal of improving the economic impact of the region’s research institutions.
The Research Commercialization Program is multi-faceted, bringing together highly successful initiatives that IW has implemented to better actuate economic growth and promote university partnerships that increase technology commercialization and company creation. It is made up of two major components:
- providing funding and strategic business support to help determine the commercial potential of university innovations; and
- applying innovative business growth strategies to rapidly transform raw technologies into commercializable products and revenue-generating companies.
Innovation Works provides both funding and strategic support to promising university technologies that cannot be licensed, productized and commercialized without its help. The quality and potential of technologies is assessed by a consortium formed by IW in partnership with technology transfer experts at Carnegie Mellon University, the University of Pittsburgh, and Duquesne University. This group reviews university technologies and makes the decision to fund ideas with the highest potential for commercial success. Once a decision is made, funding is provided through the Research Commercialization Program as direct grants that can total up to $50,000 per project and are disbursed directly to universities to fund the commercialization-related efforts – prototyping, market research, competitive analysis, efficacy testing, IP freedom-to-operate, etc. In addition to supporting these activities at the university level, IW also offers recipients mentorship and guidance from one of the organization’s Executives-in-Residence (EIRs). These seasoned business professionals and successful entrepreneurs work closely with both the entrepreneurs and technology transfer offices to ensure that beneficiaries are provided with the most complete and thorough suite of services, individually tailored to meet the specific challenges of a particular team. The work of the EIRs is intended to complement the services typically provided by technology transfer offices. While these offices excel at specific facets of the commercialization and licensing process, EIRs have extensive experience determining and ensuring a technology’s successful transition from promising idea to viable business.
For inventions and business ideas with high-growth potential that have already demonstrated commercialization potential (sometimes through the abovementioned funding mechanism), Innovation Works developed the i6 Agile Innovation System in partnership with Carnegie Mellon University to rapidly transform startups into revenue-generating companies through the application of innovative business-growth strategies. Agile innovation is based on the belief that a company must intimately understand customer need by interfacing with customers as early as possible – even before a product has been developed. A prototype product is quickly developed and presented to customers for feedback; that feedback is then used to refine and improve the product. This iterative process is repeated so that a marketable product addressing customer needs can come to market very quickly and successfully. This agile innovation process is taught through the i6 program, ensuring that companies and teams understand its value and how to implement the growth strategy to maximize the success of their product offerings.
As part of the Research Commercialization Program, Innovation Works also provides assistance to entrepreneurs working with advanced electronics and robotics through the Technology Commercialization Initiative. This initiative helps transform raw inventions into commercializable products, filling a previously unmet need in the costly research and development process. While a university partnership is not required as part of the initiative, every participating company in the Technology Commercialization Initiative is either built upon university technology or has close university ties in the form of key staff and advisors. Selected companies receive up to $100,000 in funding (plus mentorship support) through this initiative and are chosen by the members of the Technology Commercialization Advisory Board, a membership-based group comprised of university representatives and business leaders of prominent technology-based companies.
Collectively, the initiatives of the Research Commercialization Program help technology innovators overcome the early challenges of the commercialization process, contributing to the foundation of economic growth in southwestern Pennsylvania.
The Research Commercialization Program boasts impressive results and has provided valuable capital, mentorship, business assistance and networking opportunities to a significant number of technologies, teams and companies. To date, the Research Commercialization Program has:
- Awarded 93 translational research grants totaling over $1.4 million;
- Provided mentorship and business support services to 64 entrepreneurial teams working to commercialize technologies; and
- Hosted 16 agile innovation workshops.
Thanks to these efforts, participating teams working to commercialize technologies have:
- Formed 40 companies;
- Created more than 150 jobs;
- Launched over 70 products; and
- Attracted more than $110 million in follow-on funding.
As these companies and technologies continue to mature, IW anticipates all of the abovementioned metrics will increase substantially.
From the outset, IW’s Research Commercialization Program was designed to be scalable and easily replicable across industry sectors and with all types of academic and federal research entities. Seven years after first launching the Research Commercialization Program, IW applied the model to support commercialization work at a U.S. Department of Energy research laboratory. Through this effort, the Research Commercialization Program has helped evaluate over 130 pieces of intellectual property, counseled more than 35 researchers, all while helping to transform the institution’s culture of commercialization through all levels of development. IW has also partnered with teams from other innovation hubs across the U.S., coaching economic development leaders on the key strategies of the Research Commercialization Program, several of which have implemented similar initiatives in partnership with universities and other research institutions.
The sustainability of the Research Commercialization Program is derived from the increased pipeline of quality candidates that the program generates for IW’s primary investment vehicle – The IW Seed Fund. By supporting companies throughout the commercialization process, IW is able to coach entrepreneurs through common challenges associated with early stage growth, strengthening a company’s ability to attract seed, angel and venture funding, and ultimately scale successfully. Technologies supported through the initiative have become successful companies that have provided IW with healthy returns on its investments. These returns not only fund the administration of future grants through the Research Commercialization Program, but they also reduce the organization’s dependence on outside funding sources, improving IW’s overall operational efficiency and sustainability.
UEDA Awards of Excellence Finalists presented at the Annual Summit in Santa Fe on September 29-30, 2014. Summit attendees then voted for the best initiative in each category.