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The Black Hole

A model to help bring discoveries to the marketplace


In a previous post I made the argument that one way of recovering federally funded-research costs and bringing discoveries and innovations to the marketplace is by having governments included in intellectual property agreements. My guess is that getting universities to give up their patent rights and ability to claim  indirect costs from incoming grants are going to be the major hurdles in academic reform. To justify this income, research institutions should be tasked with turning basic research programs covered by government grants into profitable (and therefore sustainable) ventures. Indeed, this was a conclusion shared by a report released by the Science, Technology and Innovation Council, State of the Nation 2010, showing that while Canada has talent and resources in spades, it is not leveraging them effectively to take a global leading role in innovation.

One solution is to emphasize infrastructure by recruiting industrial partners, and connecting scientists with physicians, business professionals and engineers. In return, research institutes can retain their fair share of the profits deriving from the intellectual discovery, distributed as salary and laboratory support amongst the research faculty, with a major portion directed back into departments overseeing the commercialization of future research projects. By putting funding decisions in the hands of academic departments, which are subsequently supported by profits deriving from the technology their faculty develop, the emphasis for research faculty will be shifted toward translational research for which research institutes will have a vested interest in commercializing.

What distinguishes this model from a private start-up company is that federal support of academic institutions with public funds will direct research into areas of public need. For example, instead of supporting individual investigators, money can be paid out to select (often collaborating) departments with the necessary expertise to expand the understanding of a certain field/condition for the purposes of improving its treatment – promoting more collaborative research amongst the faculty involved.

While research labs are already exceptional at making potentially profitable and applicable discoveries – as is evidenced by a booming pharmaceutical industry in the United States – federal research support of academic institutions and departments frees researchers in these settings to pursue higher-risk science by subsidizing risk (as governments are meant to do). In order to take advantage of these funds, and support their continued existence, research institutions will have a vested interest in expanding their technology development department to turn good ideas into marketable products, sold at near-cost to Canadians (in exchange for the public’s support of academic infrastructure) and for more sizable profits outside of our borders.

Not all research will be profitable and creating allowances for profit-sharing by making academic departments responsible for funding salaries and lab support will promote faculty collaboration to turn good ideas into marketable products with broader applicability, as ensuing profits will support the individual basic research efforts of all faculty involved. Technologies developed at academic research institutes can then be leased to pharmaceutical companies at profit to develop the lower risk technological advances that will see major research breakthroughs made into practical applications.

Helping scientists develop their ideas into commercial products and allowing them to keep a larger share of the ensuing profits (perhaps as bonuses) would help leverage our current scientific excellence, recruit top scientists to Canada, and improve our global standing in technology and innovation.

Jonathan Thon
Dr. Thon is the Founder and CEO of STRM.BIO. Before STRM.BIO Dr. Thon Founded Platelet BioGenesis where he served as CEO and Chief Scientific Officer. Before Platelet BioGenesis Dr. Thon was an Assistant Professor at Harvard Medical School.
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