PublicPrivate Partnerships for Research An Industry Perspective

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• Public/Private Partnerships for Research An
  Industry Perspective

Michael Idelchik Vice President, Advanced
Technology Programs GE Global Research
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Global Research Market-focused RD

• First US industrial lab
• Began 1900 in Schenectady, NY
• Founding principle improve businesses through
  technology
• One of the worlds most diversified industrial
  labs

c. 1900
2007
Cornerstone of GEs commitment to technology
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Global brains

• 3,000 research employees (1,000 PhDs)
• 27,000 GE technologists worldwide
• 5.7 billion technology spend

Global Research Center Niskayuna, NY
John F. Welch Technology Center Bangalore, India
China Technology Center Shanghai, China
Global Research Europe Munich, Germany
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World-class technical talent
Electrical Engs
Physicists
Sustainable Energy
Biologists
Material Scientists
Biomimetics
Advanced Propulsion
Innovation
Computer Scientists
Mechanical Engs
Chem/bio Detection
Molecular Imaging
Nanotechnology
Chemists
Mathematicians
Innovation occurs at the intersection of
disciplines
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Role of Global Research

• Delivering core technologies for New Products
• Discovering New Technology-Based opportunities
• Establishing foothold in Emerging Technologies
• Spreading technology across businesses
• Developing World-Class Technical Talent
• Connecting with the Worlds Technology

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We cant invent everything ourselves
GE Partners
Customers
Business
Governments
Universities
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Underleveraged Opportunity

• Despite positives for GE,
• Tap into faculty and student creativity
• Leverage academic facilities
• Gives GE a good look at prospective hires
• And positives for Universities
• Research funding source
• Staff and students working on real world
  problems, insight into market needs
• Gives students a good look at GE
• Path for technology transfer

lt1 of GE RD at U.S. Universities
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GE indicative of a trend
(B)
US industry spent 188 billion on RD in
2004 Only 2.1 billion to U.S. academia While
percentage is declining lowest level since the
mid-80s.
200
1.5
Industry Funding of US Academic RD
1.4
150
1.3
100
1.2
50
Industrial RD Spending
1.1
0
1.0
94
96
98
00
02
04
Source NSF
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IP -- Industry US Academia at odds
AUTM US University Licensing FY05 Survey

• Most universities struggle to cover licensing
  expenses
• Negotiation of research agreements have become
  increasingly difficult
• Industry researchers have no personal financial
  stake in IP
• Concerns about academic freedom and openness

60

• Total Licensing Income 1.6B

50
40
Schools
30
20
10
0
1
3
5
7
9
gt10
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Global Options

• Stan Williams, HP Corporation, testimony to
  Congress, Sept 17, 2002
• US-based corporations have become so
  disheartened and disgusted with the situation
  i.e., negotiating IP rights with US
  universities they are now working with foreign
  universities, especially the elite institutions
  in France, Russia and China, which are more than
  willing to offer extremely favorable intellectual
  property terms.

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U.S. Industry/University research partnerships
negotiating factors
The stakes
Industry
Universities
Intellectual Property (IP)
Competitive rights, Manage filing costs
Title, industry covers filing costs, royalties
Publishing Rights
Protect proprietary information
Access to proprietary Information, with rights to
publish
Year-by-year, in-line with business strategy
Multi-year commitment
Funding
Amend Bayh/Dole, tax-exempt bond regs
Leverage Bayh/Dole, tax-exempt bond regs
Government Policies

Reaching consensus requires more flexibility in
U.S. law
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GE Aviation USA Program
Strategic alliance agreement with multiple
universities on key research projects terms
balance industry university needs
Industry
Universities

• GE gets exclusive right, royalty free license to
  use IP in fields of use

• Ownership follows inventorship

• University research roadmap aligned with
  business strategy

• Provide academia with real world technology
  experience

• Rolling, multi-year contract with university
  resource commitment

• Longer-term revenue stream

• University rights to publish

• GE review approval of publications

A model for Industry/University partnerships
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What U.S. government can do

• Reform Bayh-Dole Act flexibility on IP ownership
  rights
• Reform tax-exempt bonding policies flexibility
  on utilization of university resources funded by
  tax-exempt bonds
• Better balance between Basic and Long-Term,
  Applied research
• Create mechanism to attract and retain foreign
  intellectual talent in the U.S once they graduate

Flexibility in the law will assure long-term,
U.S. RD leadership position
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