NC bets big on profiting from campus research, but experience shows winners are rare | Opinion

One of the largest allocations in the North Carolina state budget is also the most speculative.

It’s a $500 million bet that UNC campuses beyond the state’s two major public research universities can produce technology, drugs and concepts that can be commercialized. The benefits would go to the researchers, their schools and the state economy.

That’s the idea behind NCInnovation, a nonprofit that the $500 million will endow. The idea has appeal, but it’s also unlikely to work. Major research universities have converted research into windfalls, but schools with less research funding and fewer established researchers are unlikely to do the same.

NCInnovation aims to defy the doubters. It will use a portion of the state’s two-year allocation – $50 million in the first year and up to $90 million in the second – to establish regional innovation hubs at NC A&T, East Carolina University, UNC Charlotte and Western Carolina University.

NCInnovation CEO Bennet Waters said the funding could create the same synergy between public universities and private companies that drives Research Triangle Park (RTP). “NCInnovation is an attempt to create mini-RTPs around the state,” he said.

The plan is to eventually create a larger endowment that would support getting groundbreaking research to market. The state Senate’s proposed budget called for a $1.4 billion allocation before resistance from the House trimmed it to what is now essentially a $500 million pilot project.

Waters said guiding more research to the market is a natural extension of what the state spends to support research on UNC campuses.

“It’s the concept of using money to make money as opposed to just spending money,” he said.

This investment could also be about spending money and not making money. That raises the stakes. There are plenty of needs in North Carolina where $500 million would be certain to make a difference. To a degree, the allocation to NCInnovation comes at the expense of those needs.

Robin Rasor is Duke University’s associate vice president for translation and commercialization and past board president of the Association of University Technology Managers, now known as AUTM. She thinks the prospects are dim for generating significant revenue at schools that are not major research universities.

“It’s rare — it happens — but it’s rare that a school without a good volume of high quality research is going to have really successful tech transfer results,” she said.

The gap between big players and those targeted by NCInnovation is wide. An AUTM 2020 survey of university tech transfer activity reported that UNC Chapel Hill had $865 million and $5.5 million in revenue. By contrast, UNC Charlotte had $46 million and $101,110.

Lee Vinsel, an associate professor at Virginia Tech, studies the relationship between government, business and technological change. He’s skeptical about all efforts to commercialize university research. Some schools have hit it big, he said, but the results in most cases don’t justify the cost of trying to convert basic research into products and companies.

“The number of startups and such coming out of universities is really small in the overall mix of new business being started. There’s just no proof it’s been working,” he said.

Despite a lack of results, Vinsel said, the idea persists that more spending and new approaches to tech transfer will change that pattern.

“Even though these things remain unprofitable and have been demonstrated not to work in any deep way, there’s always something new that’s supposed to make it work this time,” he said. “It kind of never goes away.”

NCInnovation isn’t going away, at least for the next two years. Whether it will work, only revenue will tell. Maybe NCInnovation will help universities generate more money. If not, North Carolina will have spent hundreds of millions on speculation while shortchanging public schools and other areas where state investment would be sure to bring positive results.

This story was originally published October 22, 2023 at 4:30 AM.