Ohio Rewarding Commercializing Universities with Cash

University administrators most commonly measure success for their technology transfer efforts by revenue generation. Public institutions, however, increasingly have state legislators, governors and local civic leaders expecting those licenses and spinoffs to occur within their political borders. Tech transfer does not always equate to regional economic development to the degree desired by policymakers.

The carrot and stick analogy plays well to the different approaches states are attempting to keep more of the technology commercialization at home. Ohio’s new Technology Commercialization Incentive (TCI) Fund is one of the latest carrots – rewarding the best schools, whether public or private, with cash.

Two weeks ago, the Ohio Board of Regents selected three universities as the first-ever recipients for TCI awards, totalling $500,000. The annual reward is based on an index score, calculated with weighted measures of:

1. Each university’s research expenditures provided by in-state companies, normalized by the total statewide research contributions from in-state companies during the previous fiscal year. (50 percent)
2. Each university’s number of productive technology licenses developed from their intellectual property during the past six years, normalized by each university’s total research expenditures during the previous fiscal year. (25 percent)
3. Each university’s number of new business start-ups based on their intellectual property during the past six years located within the state, normalized by each university’s total research expenditures during the previous fiscal year. (25 percent)

Eligibility was limited to 16 Ohio universities: the state’s 14 public institutions and two private universities that offer doctoral programs.

The institutions with the highest TCI scores were the University of Akron, which will be awarded $200,000, and Ohio State University and Case Western Reserve University, each of which will receive $150,000. The cash prizes are to be invested in either the university’s technology transfer or licensing operations or toward the enhancement of partnerships with businesses in Ohio.

Whether or not an annual cash carrot is a sufficient incentive to improve the performance of any institutions remains to be seen. On a promising note, the results of the first metric alone – the share of each school’s research expenditures provided by in-state companies – should provide an opportunity for policymakers to consider additional methods to strengthen the universities’ relationships with the state’s commercial, industrial and technology sectors. An evaluation of the initial year of this program will be included in a formal report being released in June.

The recommendation to create the TCI Program was first proposed in Building on Knowledge, Investing in People: Higher Education and the Future of Ohio’s Economy, a 2004 report by the Governor’s Commission on Higher Education and the Economy (CEED). Subsequent collaboration between the Board of Regents and the state’s Third Frontier Commission crafted the formula used to calculate each university’s TCI score. The original report is available at: http://www.chee.ohio.gov/documents/CHEE_4_22.pdf

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