Kaler shares university's business savvy at D.C. forum

  • Article by: JIM SPENCER , Star Tribune
  • Updated: October 2, 2012 - 8:36 AM

President tells federal officials of U's entrepreneurial successes.

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University of Minnesota President Eric Kaler

Photo: Jeff Wheeler, Star Tribune

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WASHINGTON - University of Minnesota President Eric Kaler appeared in the nation's capital Monday to talk about something that is not often the byword of academia:

Entrepreneurship.

Kaler came at the invitation of the U.S. Department of Commerce, not the Department of Education. His message to federal officials and other academics at a private program called "The Innovative and Entrepreneurial University: Higher Education, Innovation and Entrepreneurship in Focus" was simple. Turning campus research into community businesses fits "right in the breadbasket of a land grant university's mission."

"We were established to serve the needs of the people of the state," Kaler said in an interview.

Among the innovations that drew interest from the Obama administration were Minnesota's use of businesspeople, not academics, to staff its Office of Technology Commercialization and a program to streamline the sale of intellectual property rights from academic discoveries to commercial companies.

A former Honeywell executive runs the technology commercialization office. And intellectual property rights cost a flat $15,000 or 10 percent of the value of a commercial contract, whichever is greater. Companies with over $20 million in annual sales also pay a 1 percent royalty to the university.

Seventeen companies, including Boston Scientific Corp., have bought into the intellectual property program so far. Kaler sees them as a critical mass in changing academic culture. Several universities inquired about the program after his presentation.

"In the old days -- a decade ago -- we were considered laggards on the tech transfer front," Kaler told the commerce forum, "not only because peer institutions were ahead of us, but because the vibrant business community in Minnesota saw us as unresponsive and uncreative. We didn't do business relations well. Like many universities, we felt we didn't have to."

Now, he hopes partnerships with industry will bring internships for students, as well as philanthropy for the university from companies that strike it rich. He's looking to "reinforce the value of a research university to elected officials, business leaders and taxpayers."

"We've had 38 start-ups since 2006," Kaler said. "And 30 are still in business."

Sustainability should make entrepreneurial enterprises more attractive to his research faculty members, many of whom are driven by scientific curiosity rather than commercial applications. He called on the government to keep promising innovations alive while they move through the "Valley of Death" -- the period between invention and profitable application.

"A major problem is a lack of cash or lack of investor interest to move that innovation to the next point: generating revenues," he told the forum. "So federal agencies should seek ways to make gap funding available."

Meanwhile, the U is set to become one of the first schools in the country to offer faculty "entrepreneurial leave."

"It's a pretty new idea," Kaler explained. "We have traditional sabbatical leave to renew your research direction, or scholarly activity leave. What we're proposing is an entrepreneurial leave to help commercialize an invention you have or to work on commercializing someone else's invention."

Those on entrepreneurial leave may retain their university benefits or take a lump-sum payment to offset benefit costs. The university guarantees their faculty positions upon return. However, unlike traditional sabbaticals, which come with one semester at full pay or half pay for a full year, faculty working on commercial projects would have to find their own salary sources during their time off.

If your project is truly viable, Kaler reasoned, "you ought to be able to raise the money to pay your salary in that year."

"You don't become a successful researcher without being entrepreneurial," he added. "You've got to write grant requests and hire people. It has much more to do with running a small business than most people think."

Jim Spencer • 202-383-6123

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