U-M's idea pipeline to businesses grows; 'Tech transfer' puts inventions in public's reach, creates jobs and expands companies.

BYLINE: Eric Morath

DATELINE: ANN ARBOR

Ideas springing up in dorm rooms at the University of Michigan are more frequently becoming job-creating products in boardrooms across the state and around the world.

The pipeline between campus laboratories and the real world has widened in recent years and with it comes hope that the state's premier research institution can do more to bolster Michigan's floundering economy.

Ultimately, tech transfer -- putting university ideas into the hands of businesses -- places drugs, gadgets and other breakthroughs within the public's reach.

It also creates jobs and grows companies -- something Michigan sorely needs, experts said. That's because the inventions can ignite a startup company or drive an established firm to add jobs and investment.

U-M reached 97 license agreements, where companies pledge royalties or ownership for the right to use an idea, and recorded $20.4 million in license revenue in fiscal 2006. That's 36 more agreements and $14.7 million in additional revenue, a nearly four-fold jump, compared with five years ago, according to U-M's recently released tech transfer annual report.

U-M technology propelled breakout businesses ranging from Zattoo, a firm that allows users to watch live TV on the Internet, to HandyLab, a company with a device that can quickly detect a deadly disease in newborns.

Both firms are based in Ann Arbor.

"Tech transfer is getting the benefits of what we do out into society so it can help people, and hopefully those in this area," said Kenneth Nisbet, U-M's executive director of tech transfer.

While U-M has long been one of the nation's leading research institutions, it has failed to consistently make its findings available to businesses and the public. Critics have argued that the hundreds of millions of dollars U-M receives annually in federal research grants should do more to spark the state's economy.

Nisbet said stronger support of tech transfer from the school's administration allowed the faculty to recognize the importance of commercializing their findings. In the past, some faculty frowned on seeing their inventions used for the financial gain of outside firms, even though they'd be among the benefactors.

U-M's success the past five years, which includes starting 55 companies, is transforming the culture on campus.

"In the last five years we've gone from not being among the top 10 (for tech transfer,) to now feeling we are in that class," Nisbet said. "Success breeds confidence."

He also credited support from private businesses and the availability of state funding for helping to make laboratory ideas tangible inventions.

Cultivating technology-based companies is essential to forming a 21st century economy in Michigan, said Michael Finney, president and CEO of Ann Arbor Spark, an economic development organization.

"We haven't seen the peak yet," he said. "Tech transfer creates a steady stream of opportunities to grow businesses out of the university ... and give students the opportunity for entrepreneurship."

The state's other research institutions, Michigan State University and Wayne State University, are also striving to grow their tech transfer operations.

MSU more than tripled its number of license agreements since the 2002 fiscal year, but its revenue fell steeply, from $28 million to $2 million, as the patent protection for popular cancer drug, Cisplatin, expired.

Compared with five years ago, Wayne State doubled its license revenue to $4 million, and increased its number of agreements by about 20 to 55 this year.

"With the Michigan economy struggling with its old line industries we recognize the future is in new industries such as nanotechnology, biotechnology and homeland security," said Fred Reinhart, associate vice president for technology commercialization at Wayne State. "The work being done to develop those technologies is being done at the universities."