Falling behind in ingenuity?

INNOVATE OR STAGNATE: Growth in patent applications from the Providence metro area began to lag the U.S. in the mid-1990s. / SOURCE THE BROOKINGS INSTITUTION
INNOVATE OR STAGNATE: Growth in patent applications from the Providence metro area began to lag the U.S. in the mid-1990s. / SOURCE THE BROOKINGS INSTITUTION

Of the many theories explaining Rhode Island’s persistent economic slump, the failure to transition to technology-based industries may have the most current traction.
This winter Jennifer Bradley, a senior fellow at The Brookings Institution, highlighted the issue while addressing the Providence Preservation Society’s annual meeting, describing a breakdown in translating the Providence area’s strong academic research into commercial applications.
Providence’s innovation pipeline appears to have a “kink,” said Bradley, co-author of The Metropolitan Revolution, which argues that cities and the innovation they foster will lead a knowledge-based global economy in the 21st century.
As evidence of where the area was falling behind, Bradley pointed to Brookings’ data on patent creation released last year ranking the Providence area 81st out of 358 metros nationwide in the number of patents produced per 1,000 workers between 2007 and 2011.
The metro area has the 37th largest population in the country and Bradley said the ranking was a sign the area is lagging behind its size and not taking advantage of its considerable academic assets.
Following up this month, Bradley said the more revealing indicator of an innovation problem was a divergence in the rate of annual patent growth in Providence from the national growth rate.
“The most telling thing on the profile is the trend line between patent growth in the U.S. overall and in Providence,” Bradley said in an email. “You can see that in the mid-1990s, Providence started to lag the U.S. growth rate, and has been volatile but without significant lasting gains approximately since then, while the U.S. growth rate is up substantially.”
So is a breakdown in the process for turning breakthroughs in the lab into winning products or companies at the heart of the area’s economic woes?
If so, commercialization activity at the area’s research universities and hospitals could be a crucial factor.
At Brown University and the University of Rhode Island, the post-recession years have seen a push in research commercialization after activity plunged during the recession.
In fiscal 2013, which finished last June, Brown made $2.3 million in technology licensing revenue, a 44 percent increase from the $1.6 million it made in fiscal 2012, according to the school’s Technology Ventures Office.
The gains were even more impressive compared to licensing revenue several years ago.
In 2010, Brown licensing revenue was $502,000 after falling from just under $2 million in 2005, according to historical statistics from the Association of University Technology Managers. Patent applications also have been growing at Brown, from 39 in fiscal 2010 to 58 in 2012 and 59 in 2013. Most years, including 2013, Brown has been a part of one startup formed involving faculty members, although an unusually entrepreneurial 2011 saw four startups launched.
“Our numbers look pretty good generally,” said Katherine Gordon, managing director of Brown’s Technology Ventures Office, which works to commercialize faculty research.
Gordon, who started at Brown in 2009, said the decline in commercialization activity at the tail end of the last decade was primarily a result of the poor economy, which choked off all kinds of deals.
Because licensing revenue only flows to the school after patents have been filed and deals struck, it is somewhat of a lag indicator of commercialization activity and more gains from the recovery could be on the way in coming years, she said.
Since Gordon took over, Brown has doubled the number of staff in the Technology Ventures Office from two to four.
And last year Brown reached agreements with hospital companies Lifespan and Care New England to commercialize breakthroughs in their labs through the Technology Ventures Office.
Measuring activity at the University of Rhode Island has been more difficult since the school stopped reporting its commercialization figures to the Association of University Technology Managers in 2011.
In 2008 the school formed the URI Research Foundation, an affiliated nonprofit, to negotiate licensing deals and help commercialize research.
James K. Petell, executive director of the URI Research Foundation, said traditionally the university has focused commercialization efforts on producing licensing revenue, but in the last three years has shifted toward partnerships with local companies to translate research into economic development.
“Before it was royalty-driven and not working with companies to develop products,” Petell said. “There is much more of a focus on commercialization and creating economic development and jobs.”
Petell said URI researchers formed three startups last year and three more this year.
The URI Research Foundation last year also took over management of the Rhode Island Manufacturing Extension Service, which should bolster its relationships with small manufacturers.
In 2005, URI earned $1.1 million in licensing revenue and applied for 35 patents before, like Brown, seeing activity fall off in the latter half of the decade. Despite the gains Rhode Island universities have made in recent years, their licensing income is dwarfed by some other schools and hospitals.
In fiscal 2012, perennial commercialization leader Massachusetts Institute of Technology made $137 million in licensing revenue, applied for 426 patents and formed 16 startups, according to AUTM figures.
Princeton University, Brown President Christina H. Paxson’s former employer, made $130 million in licensing revenue and applied for 130 patents, although it didn’t report any startups.
On the public side, the University of Massachusetts made $52.2 million in licensing revenue in fiscal 2012, applying for 69 new patents and forming three startups. (It is not clear whether some of that was generated at UMass Dartmouth, which is in the Providence metro area.)
More in line with what the Rhode Island schools generated, the University of Connecticut made $965,000, applying for 42 patents, and the University of New Hampshire made $348,000 and applied for 19 patents.
Of course institutional research is just one avenue for entrepreneurial innovation, but a high place on the patent-per-worker rankings of towns with technology-focused colleges points to their importance.
“With a decrease in big-company research and development, colleges, universities and academic medical institutions such as Lifespan and Care New England provide an increasingly important source of the research that will be turned into innovative products,” said Christine Smith, director of innovation programs at the R.I. Commerce Corporation. “Rhode Island has world-class researchers and is very well situated to launch translational research outcomes.”
In addition to issuing more than $1 million each year in R.I. Science and Technology Advisory Council matching grants for research commercialization projects, this year the state added a $500,000 Innovate Rhode Island fund to seed small biotech and engineering startups.
While activity in university technology offices is important, perhaps even more crucial to taking advantage of top research is providing incentives to keep college students in the area once they graduate.
The Brookings data ranks Providence 29th in the nation in number of top science, technology and math graduate programs, but only 106th in percentage of workers with a degree in those fields. •

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