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Pg Benchmarks

University R&D: Pittsburgh's brightest prospect

March 7, 1999

By Christopher Snowbeck, Post-Gazette Staff Writer

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University R&D

It used to be that universities shared knowledge with society simply by publishing articles and training students.

Now, they also help bring new ideas to the marketplace.

Pittsburgh universities are part of the trend, developing new inventions and licensing the ideas to companies that bring them to the market.

In fiscal year 1997, Carnegie Mellon University ranked 10th among all universities in licensing income, receiving adjusted gross royalties of $13.3 million, according to the 7th annual survey by the Association of University Technology Managers. The University of Pittsburgh ranked 53rd in licensing income, receiving adjusted gross royalties of about $1.2 million, according to the AUTM report. The AUTM surveys 175 U.S. and Canadian universities, teaching hospitals, research institutes and patent commercialization companies.

Those numbers are part of a positive trend both schools report when talking about their efforts to transform university inventions into marketable innovations — a bright spot in Pittsburgh’s economic development outlook.

"Invention is the act of coming up with something that’s potentially useful, novel and hasn’t been come up with before. Whereas innovation is turning that into something that is real, that’s used commercially," said Arthur A. Boni, director of the University of Pittsburgh’s Office of Technology Management.

"In that regard, I think in all honesty the universities have been most successful in coming up with the invention part — private industry is most successful in the innovation part," he said. "The challenge is getting the two to work together."

The lifeblood of this "technology transfer" process is research and development money, said Duane A. Adams, the vice provost for research at Carnegie Mellon. Of the 14 PG Benchmarks regions, Pittsburgh holds a relatively high ranking in pulling down these funds.

According to comprehensive numbers compiled by the National Science Foundation — based on self-reporting from universities about research funding they receive from all sources, including the National Institutes of Health, NASA and the Department of Defense — Pittsburgh universities spent $338.9 million in 1997 for research and development.

The breakdown for each of the three research universities in town was: $202.5 million at the University of Pittsburgh; $135 million at Carnegie Mellon University; and $1.4 million at Duquesne University.

Adams said Pittsburgh’s ranking among the PG Benchmarks areas is consistent with the relative quality of research universities in other cities.

"When I go down this list I can’t think of anything that would be in Kansas City, Tampa, Phoenix, Portland," Adams said. "When I go down this list, there aren’t very many of these cities that have universities of the quality of Carnegie Mellon."

The regions that rank above Pittsburgh, Adams said, house research powerhouses.

Atlanta is home to the Georgia Institute of Technology and Emory University; San Diego is home to the University of California-San Diego; and Seattle is home to the University of Washington.

Universities are taking more steps to protect the intellectual property they develop in their research programs because it has value to the university, Adams said. That, in turn, can strengthen the regional economy.

"When a university creates a patent on something, we can then license it to anybody," Adams said. "It may turn out that there are a group of researchers that want to start a company. We can license the patent to them in exchange for ... equity or partial ownership in the company.

"If they’re successful and they make money, then we make money from the intellectual property."

CMU scientist Michael "Fuzzy" Mauldin, for example, created the "Lycos" search engine for exploring the World Wide Web and set up a spin-off company to develop the idea. The university and Mauldin retained minority shares in Lycos when it was sold in 1995 to a Massachusetts-based company, bringing in $4.5 million to the university.

Mark Coticchia, director of CMU’s technology transfer office, said that in fiscal year 1998, the university spun off 15 companies. Those companies can strengthen the regional economy, provided the companies retain their operations in Pittsburgh.

Cities like Pittsburgh are in a better position to keep the companies if they offer a range of "incubation" services, from office space to friendly banks, lawyers to accountants, Adams said. The community also needs to provide "angel investors" who can support companies financially, Adams said, as well as an educated workforce.

"I believe that some companies are under the impression that we may not have enough people with the qualified skills," Adams said. "It’s the chicken and the egg problem. If there were a lot of companies that were being formed and a lot of job opportunities, then people who are coming out of Carnegie Mellon and the University of Pittsburgh might be inclined to stay. But people aren’t just going to hang around here waiting for someone to offer them a job."

Ray Christman, president of the Pittsburgh Technology Council, said regional development leaders are looking to the universities for leadership in innovation.

"Thirty years ago, a lot of the research and development activity in this region was at the corporate level, and you don't have that so much any more," he said. "It's shifted, not only in Pittsburgh but nationally. The universities are the centers of research in this country now, not corporations, particularly in this region.

We'd all like to see more going on than there is, but I think both universities are trying very hard to increase their focus on technology transfer and trying to be more proactive in how they can contribute to the community."

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