BioPharma, Diagnostics

China’s technology transfer landscape – the new frontier

A number of the universities I met with, including Peking University and Nanjing University, seem to have started to pay much more attention to entrepreneurship as part of their technology transfer culture.

MedCity CONVERGEThis is part of a series looking at China’s ambitions across innovation, commercialization and the entrepreneurship ecosystem in healthcare and life sciences that were the focus of my Eisenhower Zhi-Xing Fellowship.

The first time I asked researchers at one of China’s academic research institutions “What do you think are the challenges to commercializing your discoveries?” I had no idea what to expect. I thought that if the ideas of technology transfer and commercializing academic research were not even on their radar screen, I was in store for a series of very short conversations! I was relieved, therefore, to find that researchers and administrators I met at institutions across China all seemed to have thought about the topic, and all seemed inspired to commercialize. But the experiences they conveyed were very different.

Researchers at Xi’an Jiao Tong University, for example, explained to me that while they were interested in seeing their healthcare research put to practical uses, they felt that only journal publications and research funding counted toward their professional advancement. They seemed to believe that their institution did not even have people who could assist them in commercialization.

This was not the case at all institutions — most had someone representing the technology transfer, commercialization, or business development office of the university. An official from the office of research at Sichuan University, for example, gave me a detailed overview of their four technology transfer offices, and I met with similar representatives at institutes of the Chinese Academy of Sciences in Beijing, and at universities in Nanjing and Shanghai. Most described their work in service and consulting contracts in fields as diverse as construction, diagnostics, environmental contamination management, and air traffic control.

What I found interesting was that the entrepreneurial researchers I spoke to at these institutions seemed much less tied in to institutional frameworks than I was expecting. A researcher at one of the institutes of the Chinese Academy of Sciences in Beijing, for example, explained to me that she was involved in a couple of spin-off companies. Both were linked to connections she had made through her research in food safety, and neither of them were anywhere near Beijing – one was in Guangzhou in the south, and one in the city of Huai’an in Jiangsu Province. Two researchers I met at Sichuan University told me that they had returned to China from the United States primarily because they thought it would be easier for them to start their own companies – that they expected fewer hurdles from their Chinese institution than they would have expected from their U.S. institutions.

So while Chinese academic organizations seem to capably manage contracted services to industry, it seemed to me that they were less comfortable supporting and promoting technology transfer via startups and entrepreneurship. When I asked about this, almost everyone, researchers and administrators alike, seemed to agree that technology managers at Chinese academic institutions still do not have a great deal of experience in supporting entrepreneurship as a path for commercialization.

But this seems to be changing.

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A number of the universities I met with, including Peking University and Nanjing University, seem to have started to pay much more attention to entrepreneurship as part of their technology transfer culture. They believe that the challenge is not in how to fund early stage technology commercialization, but in how to deliver. They are betting that the answer is to provide their inventors more access to local resources and to loosen control over the process. Peking University has combined their technology transfer and investment office with student entrepreneurship training – and is starting to get their students thinking about how to scale businesses based on university technologies for the China market.

Local and regional governments also seem to be anxious to provide the right tools to allow new businesses to grow locally. In Xi’an, the municipal government has established a local technology transfer center. It combines a technology marketplace, small business incubation space, professional services, a local government funding office, and an office of the China patent office – all under the same roof. They also provide free technology transfer training for local universities, incubators, business parks, law firms, and others. The 4th Global R&D Summit, organized by Jiangsu Province and Nanjing Municipality, focused on mechanisms for government and university technology transfer, featuring presentations by special delegates from a number of well-known organizations from Canada and Finland.

But perhaps one of the more significant government initiatives I came across in my travels was by the central government, which had, in October of 2015, introduced a new law governing the management of university intellectual property. Similar to the Bayh-Dole Act in the U.S., this law grants rights to Chinese universities to manage intellectual property developed using central government funding (it all belonged to the government prior to that). The new law is being piloted at 20 academic institutions across China, including Shanghai Advanced Research Institute. One of the few multi-disciplinary institutes of the Chinese Academy of Sciences, SARI, along with the newly-created Shanghai Tech University, has been charged with focusing on how to efficiently commercialize academic research.

Chinese universities are using this new law to attract academic entrepreneurs back into the fold. They are offering very large shares of university revenues from technology transfer transactions to academic inventors – Peking University and Sichuan University both explained to me that academic inventors could expect to pocket up to 70-80% of the returns. So in fact, this new law is, in effect, a hybrid of the “Professor’s Privilege” approach that was being used in Germany (and dropped in 2002) and the university-management approach that has been the mainstay of U.S. technology transfer.

As I reflect upon what I heard, I am certainly struck by the “wild west” attitude towards the technology transfer landscape among Chinese academic institutions today. To pioneers, though, that’s not necessarily a bad thing. The lack of entrenched policy and experience, the desire to establish a thriving technology transfer culture, and the willingness to experiment will make the next five or 10 years a very interesting time to study technology transfer in China. Of course, technology transfer is only the first step in commercialization – there needs to be a suitable ecosystem for these new businesses to grow and scale.

Next: business incubation and the start-up ecosystems

Photo: Institute for Health Technology Transformation

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