Tapping knowledge from university inventors

Firms that license inventions from universities often do not make the most of the arrangements because a significant portion of the knowledge generated by university inventors remains latent. In other words, it is uncodified but capable of being codified.

by Strategic Management Journal 27, Issue 1, 2006
Last Updated: 23 Jul 2013

Such knowledge is also often complex because of the nature of university research, which usually requires worldwide novelty to proceed, combined with the type of problem-solving associated with licensed inventions.

Often the solution to real-world problems requires linking disparate fields of knowledge that do not fit neatly into a traditional academic discipline. As a result, inventors often have to learn new topics on an ad-hoc basis and the knowledge associated with an invention encompasses a range of competencies that licensees might not have, particularly with a single person or group.

Licensees can significantly improve their chances of successful commercialisation of inventions by engaging the inventor. There are four reasons for this.

First, since a significant fraction of the non-codified knowledge may be codifiable, the inventor is able to transfer effectively this knowledge provided he or she is given the right incentives and means.

Second, because the inventor has mastered the complexity of the knowledge involved they are able to teach the necessary components to the licensee.

Third, in the process of creating the invention, the inventor develops intuition that enables them to predict more accurately how the invention will behave under various circumstances and thus increase the efficiency of the trial-and-error process that frequently characterises new product development.

Fourth, it is difficult to predict at the time the licence is granted what knowledge will need to be transferred alongside the invention. In other words, at this stage the licensee does not know what it will need to know in later development stages and therefore cannot contract with the inventor at the start exactly what needs to be set out and transferred. It is clearly helpful to be able to contact the inventor as and when is required as the project develops.

The study challenges the widely held belief that university-produced knowledge is freely available. In fact, important components of university-generated knowledge do not spill over. Instead, private contracts between the acquiring business and the inventor are required for the necessary transfer of knowledge.

Source: Engaging the inventor: exploring licensing strategies for university inventions and the role of latent knowledge 
Ajay Agrawal, Rotman School of Management, University of Toronto
Strategic Management Journal 27, Issue 1, 2006

Review by Roger Trapp

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