Innovating New Ways to Innovate
In the United States, we spend billions every year funding scientific research in fields from medicine to energy. What we hope to get from that investment is not only discovery and invention, but innovation—a process that includes turning the products of our brainpower into actual new products on the market, to spur economic growth and improve our lives. However, in recent years, America's vaunted innovation pipeline has been showing signs of breakdown. There appear to be multiple disconnects between our capacity for generating new knowledge and our ability to put it to use.
Since the late 1990s, for example, federal funding of research in the life sciences has more than doubled, yet the number of new drugs for medical treatment coming to market has shrunk by more than half. From 2006–'09, seventy-four new drugs won FDA approval, compared to 157 from 1996–'99. In the emerging cleantech industries, based on new technologies for generating and conserving energy, the United States has cutting-edge research, plus a venture capital industry eager to finance new firms in this space. Yet, other countries are far outpacing the United States in commercializing energy technologies.
Obviously, the recipe for better results is more complicated than "just add money." To help identify the issues and catalyze new thinking, the Kauffman Foundation launched a major initiative, called Advancing Innovation, in 2004, at a time when many still thought there were only minor problems on the innovation front. Today, the initiative is expanding greatly, both in terms of partners working with us and in terms of scope.
Our initial focus was on technology licensing offices (TLOs) at universities. These offices, charged with transferring new technologies from university labs to the private sector, often were seen as bottlenecks instead. Many individual TLOs tend to be overburdened, and numerous programs now are under way to improve the tech-transfer function by combining efforts and streamlining the process: They range from Kauffman's iBridge Network, a web-based platform for disseminating research technologies, to shared TLOs among the public universities in some states.
But a broader, systemic approach was needed. Innovation is more than a matter of handing off technologies. It is an elaborate human process that can be sharpened only by optimizing the entire ecosystem in which innovators of all kinds have to operate.
Widening the Innovation Path
Current efforts are so wide-reaching that we can give you only a brief sample here. In one thrust, we and our partners are looking at new ways to support and incentivize the young researchers most likely to become tomorrow's innovators. Postdoctoral fellows and young tenure-track faculty represent much of our top up-and-coming research talent, but they seldom are encouraged to pursue commercialization of their research. They are channeled into a more strictly "academic" research path, rewarded for publishing their findings—and for then winning still more research grants. Our Kauffman Labs Entrepreneur Postdoctoral Fellowship Program, which we launched in 2009, was aimed at postdocs interested in practical application of their work (read a profile about the work of one postdoc fellow on page 101), and others are prodding universities to give more credit to such activity in tenure decisions.
Innovation works best when it can travel by many paths from one sector to another, and when the exchange of information is constant.
We also are working to build more interfaces and collaborations between universities and private industry. The present system mainly allows for two formal modes of interface: industry sponsorship of research, and the licensing out of university technologies. That is a very limited view. Innovation works best when it can travel by many paths from one sector to another, and when the exchange of information is constant.
Last, but not least, we and our partners now are looking seriously at the public-policy aspects of innovation. Many policy barriers have arisen over the years, and many policy levers that might increase the flow of innovation haven't been tried.
For example: Huge amounts of biomedical research have been federally funded across hundreds of institutions, with no provision for building widely shared "open-source" tissue banks that other researchers could use and learn from. People talk about the tragedy of the commons; this is a failure to create a scientific commons that could greatly advance the search for treatments that have long eluded us.
Innovation in energy, meanwhile, could benefit from a "roadmap" approach like that taken years ago for semiconductors. The government and the semiconductor industry partnered to map out key new enabling technologies that would be needed by many firms in the years ahead, and formed consortia to support research in those areas. Applying this model to energy would be similar to specifying open tissue- and data-sharing in the medical space, in that both would be cases of supporting much-needed precompetitive R&D.
When precompetitive work is done widely, the glass of innovation is half full. It's then easier for individual firms and institutions to pursue a variety of completion paths. We Americans have drifted away from this approach; we are more apt to fight for competitive advantage from the very bottom of the glass, by measures such as gene patenting. So, perhaps the virtues of "precompetitive advantage" need to be explored anew.
Another area of need is helping emergent innovations to cross the proverbial valley of death, between the point where research funding ends and the point where the innovation is well developed enough to attract private financing. Small Business Innovation Research grants are one good mechanism for crossing this valley, but we need more, such as the proof-of-concept centers now operating at some universities for development work that "bridges the innovation gap." Also, in medicine, every new drug has to cross the dire valley of clinical trials. The trials are necessary for testing the efficacy and safety of drugs, but they could probably be structured so they don't consume most of the cost of drug development, as at present.
Many levers, many paths. In an era when so much is changing in science and industry worldwide, it shouldn't be surprising that much of the American innovation system needs to be re-thought or rebuilt. This is, in fact, an exciting time. Growing numbers of us are engaged in meta-innovation: innovating new ways to innovate. The opportunities are tremendous.
In the essays that follow, some of the country's leading meta-innovators share what they are thinking—and doing. U.S. Secretary of Commerce Gary Locke highlights his recommendations for enhancing innovation in America. We preview the making of the "Personalized Health Manifesto," and we feature an essay that explains how U.S. innovation policy needs to recognize entrepreneurs' role in generating clean technology business models. You also will read about how the complexity of today's world presents limitless opportunities for innovators, and we present a new tool for expediting university innovations that we hope will inspire other universities to follow suit.