Below is an editorial suggesting the nation could become more economically competitive by helping remove barriers to connect our federal lab technology, human and physical resources to the private sector. Without question, Maryland has the most to gain from this national initiative. We are home to the nation’s largest concentration of federal laboratories and many federal lab researchers live in Maryland. To its credit, the state has launched new programs to support commercialization and partnering among the state’s considerable academic research and development assets. Since federal labs are creatures of federal legislation, these efforts need to extend to federal labs, augmented with federal policy reforms. Now is the time for the state to lead the Maryland Congressional delegation, working with other state congressional delegations, to work on a bi-partisan basis to enact pathways for better connecting the human, physical and technology assets of our federal labs with their regions.
By Brian Darmody & Richard Bendis
Each year over $30 billion is spent by federal laboratories for internal research and development, nearly as much as the federal government spends on university research. The approximately 1,000 federal research labs in the U.S. also employ tens of thousands of government scientists, including Nobel Prize winners, producing advanced technologies through their sophisticated research facilities.
Federal research labs, like the research university system, can be key players in helping the U.S. compete internationally through advancing technologies discovered at laboratories into the commercial marketplace.
But, the federal lab system is a government-run, complicated resource, choked by differing rules, oversight, authorities, experience, and motivation. A recent study by theInstitute for Defense Analysis (IDA) confirms the reality. In the IDA report, businesses cite negotiation times for technology licensing to be too long and also that labs don’t effectively understand markets. And, conflict of interest rules largely prevent federal researchers from interacting with private sector business representatives. In short, the technology commercialization effort is not business-like, but government-like.
Indeed, the National Governor’s Association has identified fed labs as unrealized entities for regional economic development in the U.S. Through an executive memorandum last fall, the Obama Administration has asked federal labs to suggest new ideas to improve their performance, which were due last month.
But federal labs themselves are unlikely to suggest cross-agency, large scale solutions, since no one is really in charge of the overall federal lab system. Instead, we are likely to see a series of small, incremental reforms at the individual agency level that could offer some improvement. However, the conversations around these incremental reforms underscore the disturbing reality that they would only usher the further sub-optimization of our country’s investments in the federal lab system. The federal lab system is too complicated to effectively reform by tinkering with individual authorities and programs.
The university technology commercialization ecosystem is far from perfect, but universities have the benefit of a tradition of economic engagement with communities, and leadership from university presidents and state governors. Research universities and states have worked to improve the performance of technology commercialization, through creation of new organizations such as university patent foundations, or have created state quasi-independent state intermediaries, such as the Maryland Technology Development Corporation (TEDCO) to assist in university based economic development. Some universities, such as the University of Wisconsin, have a long history of technology transfer success by creating an affiliated technology transfer organization, the Wisconsin Alumni Research Foundation (WARF).
True, federal labs can partner with states or universities, but these partnerships are agency-limited, legally constrained, and geographically based.
Instead let’s take some lessons from research universities and states and have Congress create an affiliated federal lab authority.
A Federal Lab Innovation Authority would be a congressionally chartered intermediary that existing federal labs and their offices of technology transfer could use to legally assign government-produced technologies, federal researcher’s time, or access to equipment, making these resources available to the private and non-profit sectors.
This would not be a new bureaucracy or a new large entity. The authority would be staffed by experts with private sector experience in business and entrepreneurial development. This new entity would be a tool that federal lab managers could use to augment their technology engagement with communities in a highly transparent and accountable way. It would allow the private sector to broker more effectively with the federal labs.
And there is precedent for such an approach. Congress authorized the establishment of the Henry M. Jackson Foundation for the Advancement of Military Medicine, a private, not-for-profit organization that has shown great results in supporting the Uniformed Services University of the Health Sciences and military medical research programs. When Congress wanted to revitalize Pennsylvania Avenue, it chartered the Pennsylvania Avenue Development Corporation to successfully take on the business tasks of cleaning up Congress’s front gate. Why not an organization to take on the business tasks of better converting our nation’s federal lab technology, human and equipment resources for economic growth? A quasi-governmental authority that has the right agreements and leaderships can operate outside of the government red tape and move the needle on this critical issue in particular.
An independent expertise-driven intermediary has been implemented recently in Central Maryland with the formation of BioHealth Innovation (BHI), a private sector funded organization with the primary mission to identify and accelerate commercially relevant science and technology much of which is federal laboratory technology. BHI has entered into a Partnership Intermediary Agreement and has implemented an Entrepreneur-In-Residence program with the NIH Office of Technology Transfer, which supports the $3 billion intramural research of the 27 NIH Institutes as well as the Food and Drug Administration. BHI fulfills the Obama mandate through targeting the vast commercialization opportunities at the NIH and building a model private public partnership where all key stakeholders are part of the implementation, while also retaining an industry and market focus.
Just because you have good ideas doesn’t mean you can convince policymakers to support them. Recently, Congress did pass the Jumpstart Our Business Startup (JOBS) Act on a bi-partisan basis, surprising Congressional observers. The JOBS Act reformed rules on accredited investors investing in small startup companies. The jury is still out on whether the reforms will work, but the major lesson is that the bill passed since it was asking for increased permission, instead of new funding.
The Start Up Act, introduced by Senators Warner (D-VA) and Moran (R-KS), is focused on removing barrier to entrepreneurial growth, moving research from university labs to the marketplace and attracting and retaining entrepreneurial talent in the US. There is debate on some aspects of the Start Up Act, but generally the bill has many important attributes. But role of federal labs is missing entirely from the Start Up Act. Adding a section to the Start Up Act to address the nation’s need for a federal lab authority is a perfect legislative vehicle to implement this proposal.
One hundred and fifty years ago, President Lincoln signed the Land Grant Act, which developed the history and tradition of publicly supported universities engaging with their communities and industry. A federal lab authority is a 21st Century version of the Land Grant Act for our nation’s federal lab system.
As we celebrate the Land Grant Act anniversary, what could be more appropriate than to extend this tradition to federal labs? As we face growing global competition, what could be more important?
About the Authors
Brian Darmody is Associate VP for Research and Economic Development and Director of Corporate Relations. He wrote the legislation that created the Maryland Technology Development Corporation (TEDCO).
Richard Bendis is the interim CEO for BioHealth Innovation, Inc. He is the founding President and CEO of Innovation America, a national public-private partnership focused on accelerating the growth of innovation economy in America and publisher of the Innovation Daily newsletter.