In China, while universities are hotbeds of creativity and research, the actual commercialization of their inventions remains disappointingly low.
Why the disconnect from university inventions to the marketplace and from uplifting tunes to unforgettable experiences, we're sharing the happiness that lit up our week, essentially what's made us happy in Roundtable's happy place.
Coming to you live from Beijing, this is Roundtable, and I'm Hei Young.
For today's program, I'm joined by Steve Hatherly and Ding Hung in the studio.
First on today's show.
Despite China's leading position in global scientific research, university innovations face a surprising roadblock, turning research into commercial success.
Recently, scholars from Tongzi University's National University Science and Technological Park highlighted in a report published by News Portal, the paper .cn, that only 3 .9 % of Chinese university patents are successfully commercialized, meaning most inventions never reach the market.
So 3 .9 % sounds very low, but let's do dig into the numbers to understand further the subject.
And Ding Hung, please take up that responsibility now.
Yeah, so according to a 2022 Chinese patent survey report issued by China's National Intellectual Property Administration, the scholars from Tongzi University have made remarks based on this report, too.
Basically, the industrialization rate of patents in universities, like you mentioned, is only 3 .9 % and only 40 % of the enterprises incubated by the 139 National University Science and Technology Parks in China were funded by university professors and university -based students.
And there are even fewer enterprises that are funded based on universities' scientific and technological achievements.
The overall industrialization rate of patents in China has actually shown a steady upward trend in the most recent years, reaching a new high of somewhere around 37 % in 2022.
However, the rate of invention patents was 48 % for companies, many words be private companies from the private sector, some 13 % for scientific research institutions, but only 3 .9 % for universities.
Yeah, and that means 96 .1%, if my math is correct, never see the light of day, if you will.
They never make it to market.
Yeah, and that's out of all university patents.
But from what Dingheng just said, it's not a problem in China, right?
It's a pretty good success rate of the number of patents that make it to market overall, a higher statistic, a higher percentage.
The issue here is specifically with the universities and specifically with the fact that their inventions, the things that they are creating the majority of, are never getting out to people like you and I.
Right. And also one thing might be a little bit counterintuitive for most lay persons looking at the situation that is, or maybe this is also a little bit of the international influence on our impression that is usually at least, let's say in the US or UK, the universities are a creative powerhouse
for scientific discovery and a lot of other innovations.
And therefore you would think that a lot of these new inventions that we could enjoy in the commercial market would come from there.
And in reality, in a lot of these Western countries, that is pretty much right.
But here in China, and when people try to make the comparison and they think, huh, the universities must be turning out a lot of these new products as well, since that's where a lot of the invention is happening, but that seems to not be the case.
And here, well, I'm very intrigued by the mechanics behind it all.
And in the universities, the key facility to support turning new ideas and discoveries into commercial products is called the University Science and Technology Park.
Can I ask what that is?
That's a new term for me.
Well, yeah, that's a new term for me as well.
But after doing some research, I found that it is a facility that is designed to support the growth of tech -based business opportunities.
Its primary goal is to help turn those scientific discoveries and research results in the labs, mostly from universities into our real world commercial products and services.
So they are supposed to provide the resources for startup companies, foster innovation, et cetera, et cetera.
And I guess in some overseas cases, there are examples, like with Stanford University, with the MIT in America and the Cambridge University in Britain.
And the Cambridge Science Park is Europe's longest -serving science park, and it focuses on innovation and technology transfer.
And these facilities are critical in fostering collaboration between academia and industry and helping to develop cutting -edge technologies and nurture entrepreneurial talent.
MIT in the United States, the Massachusetts Institute of Technology located near the city of Boston or in the city of Boston, they are, I read in 2023, they put out the most patents for a single campus university, not as far as I know, not the highest number in the United States.
But for a single campus, they always put out a lot.
California has a system of different schools in many campuses.
They always lead, I think.
But MIT, you mentioned, yeah, they're pretty smart and they do a lot of good work in terms of creating.
But what's the disconnect?
Let's get into it if we could.
Like, what's going on here in terms of why China has a high technological innovation capability, which is pretty obvious, I think, to the world, but the transition from university products or creations into that real world or industry?
What is the struggle?
Where does the struggle come from?
Well, here, let's get into the first part of the disconnect.
So there is this high numbers in a few areas, such as the number of hot papers.
That's the number of citations of these papers being published that are really high and therefore they deserve the crown title of hot papers, I suppose.
And also the number of valid patents and such.
Ding Hong, could you help us get through?
Yeah, so let's get to this part of the situation.
Yeah, indeed. Because according to some media reports, China is leading the world in terms of six particular scientific research fields in terms of the total number of citations generated by the country's academic papers.
They include agricultural science, chemistry, computer science, engineering technology, materials, science, and mathematics.
And also, according to China's National Intellectual Property Administration, as of September last year, the number of valid patents owned by Chinese universities and colleges had reached 767 ,000, and those owned by research organizations or institutions based in this country had reached 220 ,000.
These two account for a quarter of the total number of valid patents in China.
And in recent years, we've seen in Chinese universities, and this is following, I suppose, a global trend, that is, there is a great emphasis on publishing.
And that we've talked about on a previous show, a parish or publish, and a lot of the scholars are under immense pressure to publish.
And also, citation comes after that, which is proof to, while you've published something meaningful and your peers approve of it, basically.
And also, with the number of patents that are being approved and recognized, these, I suppose, are maybe some of the very many criteria that can be used to judge how adept the academic research is to at least being recognized by its circle, so to speak.
And also, on top of that, then here comes the other side of the disconnect.
That is, well, when it comes to transferring something from the campus onto the marketplace, and then there seems to be a thousand hurdles.
Yeah. I was looking at a website called academicentrepreneurship .pubpub .org, strange little website.
And they defined how it happens in America, when you have to get the product or the invention from the university out into the marketplace, so people like you and I can buy that.
So here's how it goes.
First, an academic entrepreneur, they have to clarify ownership of their invention, and they have to establish an intellectual property protection plan before commercializing even begins.
And in most cases, a university employer will own the invention created by its researchers or its faculty, in conjunction with the employment.
So if I'm a researcher at a university, university ABC, and I come up with an invention or a creation, and I want to get that commercialized, well, first of all, technically speaking, I don't own that creation because I'm an employee of the university.
So therefore, that's step one in terms of how to figure out how to get it commercialized.
Then a university can either license out the, my, let's use me as an example, the university can license out my invention to a third party company, let's call it, I don't know, your guy's company, X, Y, Z, and further develop it and commercialize it, or the university can license it back to me so that I
can commercialize it and set up a third party partnership myself or set up my own business myself.
It's quite complicated, even from the very beginning.
Yes. And actually I've done some digging and to support what you just said, Steve, this is a fascinating process.
And okay, it came to me via Walter Isaacson's book, The Code Breaker, the story about Nobel prize winner in chemistry in 2020, Jennifer Doudna, a pioneering biochemist best known for her code discovery of CRISPR -Cas9 gene editing technology, which has revolutionized the fields of genetics and biotechnology.
What struck me most in this context was how Stanford University played a crucial role in the commercialization of Jennifer Doudna's discoveries, particularly in the field of gene editing technology.
And Stanford, known for its strong connection between academia and industry, helped facilitate the transition of her scientific breakthroughs into practical applications through its very robust innovation ecosystem.
So the university supported the patenting process for Doudna's technology discoveries and helped connect her research with biotech companies eager to develop commercial products.
And the university's technology transfer office actually worked to protect intellectual property rights and license the technology to those companies that could turn it into real world applications, such as gene therapies and agricultural enhancements.
And this collaboration between academia and industry fostered by Stanford was key in taking Doudna's revolutionary research from the lab to the marketplace.
So this is just one of the very vivid examples.
And you know what comes out of this?
Billionaires. Yeah, right.
Yeah, of course. And then also the next level research, funding for the research that could push the research on and also this improves the quality of lives of people as well, right?
Of course. So yeah, the example you gave is a great one.
And the example that I gave about how transfers work in the United States, it's good to know.
But why are the transfers so difficult here in China?
Because you have the technology park, right?
You have the resources, the outside resources who are there to assist in this.
So why is it so difficult?
So my sense is that, you know, usually we have this idea regarding, say, talent.
But usually there will be two categories of talent, one talent for the lab, experiment and all kinds of scientific research.
Another type of talent that is for commercialized operational issue talents for the business community.
But my sense is that there is a lack of talent who would serve as a conduit between these two groups.
So there is a lack of talent in general who possesses scientific research skill and market awareness.
I guess there is a lack of awareness regarding transforming those breakthrough from the laboratories into realistic productivity.
And there is also a mismatch, I guess, between the technology supply and the industrial demand.
Because many of those R &D's are not, in the very first place, oriented towards application.
We need to remember that when we're hearing this statistic 3 .9 percent.
Because when we discuss this topic on the surface, we might think, oh, universities are just constantly working to pump out different products for us to use in our daily lives.
And that's simply not the case.
So that's one of the big reasons, perhaps, why that you're going to see a lower number in terms of from lab to market, if you will.
And also, just think about this.
The universities, they're coming up with new discoveries, inventions, designs, and then they have it patented.
And therefore, you secure the copyright or the intellectual property rights of the technology.
But for it to be applied in everyday life, there's another major leap, another major jump.
And usually, it's the companies that could help to churn out products.
And then from the technology to the product, actually, a million things could go wrong.
And it's not always the professors and scientists who are making that happen.
So it also explains why, just how difficult to find this good conduit mentioned by Ding Hong, kind of explains why it's so difficult for universities to successfully do this.
And also, the earlier figures that you guys cited, that it's often the companies themselves coming up with inventions and then successfully turning it into products.
Because when you've not got the conduit, then it's best just to do it in -house.
And universities are kind of struggling with that.
And also, I saw one of the criticisms, and this is maybe some people, I suppose, so because they're so concerned, and then they have such good faith in this, and they become very critical, that is, some people are lambasting, saying that, well, you know, if something cannot stand the test of the market,
then it's because it was useless to begin with, because of the quality of some of these inventions or technological discoveries or whatever you call it, are simply not up to standard in the first place.
Yeah, I mean, and that's probably true for some of them, right?
Not all of the inventions that come out of the universities around the world are going to be game changers.
Sometimes it's that, sometimes it's timing.
Have you ever heard of Catherine Hettinger?
Who's that? Catherine Hettinger, she came up with the original idea for the fidget spinner back in 1993.
A fidget spinner is such a simple little thing.
It's a little toy that sits on your fingers.
It's a three -pronged thing.
It looks like a bicycle wheel almost, and you spin it around on your fingers.
And the reason she invented it was for her daughter to help relieve stress and anxiety.
And she got the patent for it, I think it was a few years later, maybe in 1997 or maybe it was 1993.
Anyway, she tried to sell it to toy companies.
She couldn't sell it.
And then every year with a patent, you have to renew your license, right?
You have to pay for it every single year.
It was about 300 or $400.
She kept that license for the patent until 2005.
Then she didn't have enough money that year to pay for the to pay for the patent license.
So she lost it, meaning it just goes out into the public sphere.
Someone else did it.
The market decided, hey, this is actually a really cool toy around 2014 or so.
No, not millions, tens of millions of dollars in sales.
She didn't see a penny.
So my point is what's considered useless now might not be considered useless in the future.
So maybe that's not a fair criticism.
That's my point. That's a good point.
And another angle to this question we are discussing right now, I can somehow think of is that in addition to this mismatch between the labs and the markets, there is also this a geographic mismatch here in China's case.
Because if we think about, say, models over there in Silicon Valley, they have the startup, they have the Stanford University.
But here, some of the best science and tech oriented universities or research labs are mostly concentrated in the Chinese capital here in Beijing.
But Beijing is not necessarily the best place for incubating businesses and startups.
As for my chat with some of my friends from the banking industry, from the business community, they will say the best place to start a business is in the Great Bay Area, in Guangdong, Hong Kong, Macau area.
But if you think about that area, they boast a very limited number of universities that are known for their scientific research.
There are some like Hong Kong Polytech University, Hong Kong University, but compared to Beijing, it's limited.
Yeah, that's an interesting observation, because yeah, this reminds me of what is it called, the beehive effect or something like in the California.
Well, you've got the Silicon Valley area, you've got the world renowned cluster of universities nearby, and then basically you have the university and then it's so easy to set up startups and businesses nearby, and then also attracting talent.
And when the talent brings in their family to come over and then the whole place, everything's sort of just one step by another and they're all connected and then the area thrives and generates a lot of GDP, so to speak.
And so for that kind of clustering beehive effect to happen, you can't just have one, not the other.
It's a support network, right?
And remember this as well, for these professors or researchers who are creating these products and if they do get their patent and if they do, okay, do I start my own startup or do I outsource to a third party which has its advantages and its disadvantages?
But every tech startup, a tech startup is a lot more expensive than opening a coffee shop on the corner, right?
And that startup money needs to come from somewhere, so if you have the technology parks here who are offering, you know, it's a support system, but they need funding too.
So these are expensive ventures from the get -go and that's another reason why it might be a holdback.
Yes, and also if you have a professor or a scientist trying to sell the idea, I don't know if that person is always adept with the necessary skills in doing so.
So we've listed a lot of these like difficulties.
What do you think are possible or maybe existing measures that might be able to address some of them?
Well, I think on the government part, there have been a lot of endeavors actually.
For example, China revised its law on promoting the transformation of scientific and technological achievements back in the year 2015, which established a fast track between research achievements and the market demands.
And over the past eight years, they have indeed achieved a lot of progress in this regard.
But that's being said, I think what has been down is far from enough.
A lot more needs to be done.
Maybe setting up specialists within the universities, the in -between people, if you will, almost like not agents per se, but playing that role, having specialists within the universities that could track and analyze papers perhaps that were published in high level academic journals and maybe then organized
selection activities for achievements for people who have or products that have real potential.
So they don't get lost in the mix.
Yes, when university innovations reach the market, they can help to solve real world problems, improving the quality of life for people and position a country as a leader in global innovation if it's done really well.
And actually the criticisms that came from these Tongji university professors or scholars who actually work in a college in their own university science park, I think it is worth our attention because they're really sure they work in the field and they're saying that, well, there's still a lot that needs
to be improved. And it seems like they could also work on improving what they're doing because they're sort of supporting the people who need their expertise in this area for these university inventions to really thrive in the market.
And bridging the gap between university research and the marketplace is not just about financial gains, it's about shaping the future with innovation that benefits society.
Finding ways to accelerate this process is key to unlocking the full potential of academic research in this country.
