Nicole Baute Honorée. LSU System Director of Research & Economic Development Initiatives February 28, 2013

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1 Nicole Baute Honorée LSU System Director of Research & Economic Development Initiatives February 28, 2013

2 Overview The National Research Landscape Research Activity in the LSU System The National Commercialization Landscape Tech Transfer Activity in the LSU System Implications for Economic Impact of LSU

3 Measuring Research Activity The National Science Foundation (NSF) conducts an annual survey (referred to as HERD ) that is considered the premier measure of university research and development (R&D) activity. The HERD captures actual annual university expenditures on R&D from all sources of funding. The HERD has very specific directions and definitions, increasing its reliability and comparability. Expenditures are NOT the same as Awards. Major categories are total, federal, state, industry

4 National R&D Expenditures FY2011: Top 25 vs. All LA University R&D (NSF, dollars in thousands) $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Scale Matters!!

5 National University Research Landscape NSF HERD FY2011: $65 billion academic R&D expenditures $41 billion from federal sources ALL U.S. Universities 63% federally funded LSU System 42% federally funded Total R&D $$ change One year (FY10-11): 6% Five year (FY06-11): 31% Total R&D $$ change One year (FY10-11): -1% Five year (FY06-11): 14% Federal R&D $$ change One year (FY10-11): 9% Five year (FY06-11): 32% Federal R&D $$ change One year (FY10-11): 1% Five year (FY06-11): 21%

6 $450,000 $400,000 $350,000 $300,000 LSU System Annual R&D Expenditures (without UNO, dollars in thousands) $250,000 $200,000 Total Federal $150,000 $100,000 $50,000 Avg. Fed as % of Total : 38% $0

7 LSU System Total R&D Expenditures, By Campus (dollars in thousands) $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 HSCS HSCNO LSUS PBRC LSU AG LSU A&M $0

8 LSU System Federal R&D Expenditures, By Campus (dollars in thousands) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 HSCS HSCNO LSUS PBRC LSU AG LSU A&M $20,000 $0

9 LSU A&M Peer Comparison: FY2011 TOTAL R&D Expenditures (NSF, dollars in thousands) $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0

10 LSU A&M Peer Comparison: FY2011 FEDERAL R&D Expenditures (NSF, dollars in thousands) $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0

11 180, , ,000 Major Sources of LSU System R&D Expenditures (dollars in thousands) 120, ,000 80,000 60,000 40, ,000 0 Federal Government State and local governments Industry

12 LSU System Faculty Employment 1,400 1,200 1, Professor Associate Professor Assistant Professor Research Associate

13 Measuring Technology Transfer Technology transfer refers to a broad set of activities and agreements that help move inventions along the pathway from concept to commerce The federal Bayh-Dole Act of 1980 is the legal foundation of most university tech transfer activity The Association of University Technology Managers (AUTM) conducts an annual survey of metrics which capture certain activities of university tech transfer

14 Technology Transfer: Myth vs. Reality Universities make a fortune with their inventions. Licenses always go to large, established companies. Most disclosures should be turned into start-ups. All licenses make lots of money for the university. Half of institutions made less than $2 million in 2011 Nearly 70% of licenses go to small companies & start-ups Only about 15% of licenses are for inventions that are broad enough to form the basis of a start-up. Only 0.5% of licenses make more than $1 million/yr.

15 National Commercialization Landscape Benchmarks for Technology Transfer Activity 1 invention disclosure per ~$2.5 million in R&D ~25% of disclosures eventually get licensed 1 start-up company per ~$100 million in R&D ~47% of legal expenses reimbursed Patent apps filed on ~60% of new disclosures Only 0.5% of licenses generate >$1 million Average ROI for Universities ~ 3.3% Source: Speaker Analysis of AUTM FY2011 Repot

16 LSU System Invention Disclosures 180 Actual vs. Expected Invention Disclosures (1 per every $2.5 million in R&D expenditures) Actual Disclosures Expected Disclosures

17 LSU System Invention Disclosures, by Campus LSU A&M Ag Center Pennington HSC-NO HSC-S LSU-S

18 LSU System Patent Activity Filed 20 Issued

19 LSU System Licenses & Options Signed, by Campus HSC-S HSC-NO Pennington Ag Center LSU A&M

20 Start-up Companies based upon LSU System Inventions (expect 1 for ~$100 Million R&D) Actual Expected

21 LSU System License Income $13,000,000 $12,000,000 $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ HSC-S HSC-NO Pennington Ag Center LSU A&M

22 LSU System License Income, By Campus, ALL Campuses $12,000,000 $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 LSU A&M Ag Center Pennington HSC-NO HSC-S $1,000,000 $

23 LSU System License Income, By Campus, without Ag Center $700,000 $600,000 $500,000 $400,000 LSU A&M $300,000 $200,000 $100,000 Pennington HSC-NO HSC-S $

24 Return on Investment (ROI): LSU System License Income as % of R&D 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00%

25 LSU System Campuses: Legal Fees Spent & Reimbursed $1,200,000 $1,000,000 $800,000 $600,000 Expended $400,000 Reimbursed $200,000 $

26 LSU System Campuses: Legal Reimbursement Percentage 180% 160% 140% 120% 100% 80% 60% 40% 20% LSU A&M Ag Center Pennington HSC-NO HSC-S National Average 0%

27 LSU System Campuses: Tech Transfer Office Staffing Levels (System total FTE in white box, year office launched in legend) LSU A&M (1985) Ag Center (1986) Pennington (2000) HSC-NO (1999) HSC-S (2001) LSU-S (2006)

28 University Research & Economic Impact Research activity is a fundamental input supporting the mission of a land grant institution Knowledge and innovation are outputs of this research activity These outputs can be transferred out through multiple channels: Student internships & corporate hiring of graduates Publications & presentations Faculty consulting, collaboration & visiting appointments Industrial research partnerships Licensing inventions to existing or start-up businesses Strengthening LSU s research enterprise, and thus its economic impact, requires sustaining and increasing the activity flow through this R&D pipeline of inputs and outputs.

29 Evaluating the R&D Pipeline at LSU: Trends of Concern??? 180, ,000 Major Sources of LSU System R&D Expend. 140, , , LSU System Invention Disclosures 80,000 60,000 40, , ,400 1,200 Federal Government State and local governments LSU System Faculty Employment Industry , Professor Associate Professor Assistant Professor Research Associate The desired university outputs cannot grow when the fundamental R&D inputs are declining.

30 A CLOSING QUESTION: What must be done to sustain and enhance the inputs into the LSU R&D pipeline to increase both the volume and variety of outputs, and thus expand LSU s economic impact?