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Greg Satell
April 19, 2016
Since World War II, the U.S. has been an innovation superpower. In virtually
every advanced field, whether it s information technology, biotechnology,
agriculture, or renewable energy, America holds a leading position. Other
nations may challenge in one field or another, but no one can match its depth
and breadth.
To account for its success, many point to America s entrepreneurial culture,
its tolerance for failure and its unique ecosystem of venture funding. Those
factors do play important roles, but the most important thing driving America s
success has been its unparalleled scientific leadership.
While private companies employ some excellent scientists, most of America s
scientific research is publicly funded. Take a look at any significant
innovation, such as an iPhone, and you ll find that most, if not all, of the
technology came from some government program. Google got its start from a
federal grant. This is no accident, but the result of the national strategy
that Vannevar Bush outlined in his 1945 report to President Truman, Science,
The Endless Frontier that led to government agencies such as The National
Science Foundation (NSF), The National Institutes of Health (NIH), and the
Defense Advanced Research Projects Agency (DARPA).
It has been this architecture that has driven America s technological
leadership, funding everything from the first computers, the internet, GPS,
laser scanners at stores and most blockbuster drugs. Return on this investment
is high, estimated to be anywhere from 20% to 40%. So for companies looking to
create revolutionary products, identifying and accessing cutting edge,
exploratory research is a key competitive advantage.
As Bush wrote in 1945: New products and new processes do not appear
full-grown. They are founded on new principles and new conceptions, which in
turn are painstakingly developed by research in the purest realms of science.
Yet that poses a problem for managers. If, as Bush argued, there must be a
stream of new scientific knowledge to turn the wheels of private and public
enterprise, how can a private company find out about that new knowledge, and
turn publicly published research into a competitive advantage?
Monitor and participate
One way that firms identify and access crucial research in the public domain is
to simply monitor what s going on in the academic world. Federally funded
research is published openly, so monitoring scientific journals, sending
internal researchers to conferences and working closely with the offices of
technology transfer at government agencies and research centers is invaluable.
In the pharmaceutical industry, the monitoring process can be incredibly
elaborate. Perry Nisen, CEO at Sanford Burnham Prebys Medical Discovery
Institute, points out that his former employer, GlaxoSmithKline, has thousands
of people working in R&D and assign experts to specific areas of interest,
which some spend their entire careers focusing on.
Most companies don t have those kinds of resources though and take a more ad
hoc approach. Eric Haller, EVP and Global Head at Experian Data Labs emphasizes
creating a culture of discovery. We pay for our data scientists to go to the
conferences of their choice, encourage them to publish white papers and we have
weekly seminars so that they can share what they ve learned, he says, but
doesn t assign formal areas of focus.
The key, emphasizes Jeff Welser, a VP and Lab Director at IBM s Almaden
Research Center is to be seen as an active participant and not just a
spectator. Being immersed is incredibly critical, he stresses. You need to
have people active at conferences, writing papers and helping the field
advance. You have to put value in to get value out.
Partner
One way that some firms get the inside track is to partner directly with
academia so that they don t have to wait for results to be published in
journals (which can take years). Daniel Hook, MD, of Digital Science, explains
that these are structured differently than government grants and that while
corporate partnerships are often more flexible, researchers are also asked to
do more.
Generally more is asked of researchers in a private partnership, such as
consulting with internal researchers, he says. There are also often
milestones put in place that determine whether funding continues.
Additionally, companies sponsoring research usually insist on first right of
refusal for any commercialization of the research and require approval prior to
publication.
Giulio F. Draetta, the Director for MD Anderson s Institute for Applied Cancer
Science believes that aligned incentives are crucial to making these
partnerships work. He advises first to put in place a system that recognizes
contribution based on having achieved an agreed-upon task, such as identifying
a particular molecule or receptor in cancer studies.
Yet partnering with academia can also be done at a much smaller scale. Digital
Science s Hook points to Elsevier, which offers small prizes, usually just a
few thousand dollars, for scientific achievement. IBM s Welser advises smaller
firms to look to cultivate relationships with a couple of professors. I would
also think seriously about geography and build up relationships with
universities in your area that you can drop in on and interact with.
Bridge the cultural divide
One pitfall for firms looking to mine research in the academic world is the
cultural divide between academic scientists who are doing exploratory work
(called basic science, although it s far from introductory!) and those who
are focusing on research of a more applied nature. Often, scientists themselves
are don t agree on which approach is more fruitful.
For example, Sanford Burnham s Nisen told me, I try to find people, physician
scientists especially, who understand unmet clinical needs and can verbalize
the pharmacological effect that we can work back from. From there, we can go
searching through the science to find useful solutions to the problem.
Yet MD Anderson s Draetta takes the opposite view. He says, I still think that
the greatest discovery comes from exploratory research in which there is not a
specific target. Starting with a specific disease in mind is more high
percentage, but the real breakthroughs come from basic discoveries, and points
to the recent advances in immunotherapy as a prime example.
Lynda Chin, of the University of Texas explains, Basic science is a long-term
proposition. You need to be single-minded and stick with it until your
hypothesis is disproved. Applied science, however, requires execution by a
cross-disciplinary team and you need to constantly make decisions about time
and resources, taking into account not only probability of success, but also
opportunity cost.
The bottom line, she adds, is that this means you have to work hard to
integrate two different cultures and it is a challenge to do that effectively.
We need to build a culture of understanding between the two disciplines.
We need to move faster
Throughout history, integrating science and industry has proved to be an
unwieldy process. Michael Faraday discovered the principles of the dynamo and
the electric motor by the 1830 s. Yet the first electrical plant, Edison s
Pearl Street Station, wasn t built until 50 years later, in 1882. Still,
economist Paul David points out that the real impact didn t come until the 1920
s. Ignaz Semmelweis argued for hand-washing in obstetric wars back in the
1840s, before being ostracized by the medical community. Today, doctors still
have trouble remembering to wash their hands. Penicillin was discovered in
1928, but wasn t commercially available until 1945.*
And lest you think that that long delays from scientific breakthrough to
product are a thing of the past, consider the case of the Macintosh. Apple
launched its revolutionary computer to great fanfare in 1984, but all of the
basic functionality was on display as early as 1968, at Douglas Engelbart s
Mother of All Demos. Xerox had a working version as early as 1973.
True, we do have far more capabilities to catalog and search information today.
Resources like Google, PubMed and ArXiv make it much easier to locate published
scientific work. Other tools, such as Figshare, UberResearch and Symplectic
provide further resources to identify promising research. Yet we have a long
way to go to bridge the divide between industry and science.
It s worth the effort. As IBM s Welser explains, The thing that s nice about
that kind of setup is that you get to pool your resources with government,
academia and other industry players, which is a good thing at the
pre-competitive stage. Of course, once the collective breakthroughs become
exciting new products, IBM and competitors like Intel and Microsoft fight like
dogs.
And that, probably more than anything else, encapsulates how firms need to
pursue exploratory research. Commerce is a necessarily competitive endeavor.
Discovery, on the other hand, is a collective one. The two, however, aren t
necessarily mutually exclusive. In fact, if you want to compete at the highest
level, you have to treat collaboration as a competitive advantage.
available as 1943; it wasn t actually commercially available until 1945.
Greg Satell is a U.S.-based business consultant. You can find his blog at
Digital Tonto and follow him on Twitter @DigitalTonto.