The opportunity
In our previous post, we discussed the challenges that federal labs face when commercializing research. Be sure to check that out.
In this post we will dive into the many opportunities that exist within federal lab commercialization.
Addressing our biggest problems
The research conducted in federal labs is often directly aligned with addressing large societal challenges. Therefore, these labs have a wealth of technologies that have the potential to make significant contributions to society.
From renewable energy technologies that can mitigate climate change to biomedical innovations that can improve health outcomes. The scale of resources and funding required for these projects is so substantial that typically only the government emerges as a realistic funder.
While the development of these technologies within labs is crucial, the real opportunity for impact lies in bringing them from the lab to the marketplace. Here, they can have the greatest impact on our society, removing carbon from our atmosphere or doing targeted cancer treatment through gene editing.
Beyond societal benefits, these technologies also present large market opportunities. Take, for instance, gene editing, a relatively new technology that has received significant funding from the U.S. government. The market size is expected to be $36 Billion by 2032, growing at nearly 20% a year.
Public-Private Partnerships
When taking these technologies to market, there is growing recognition that public private partnerships are essential for success.
These partnerships combine government-funded research insights with the efficiency, innovation, and speed of the private sector, accelerating deployment of these new technologies.
Public-private partnerships take different forms, but one of the more impactful is a cooperative research and development agreement (CRADA). In this agreement, the lab provides resources like facilities, equipment and personnel, and the private partner provides access to markets.
This collaboration often leads to faster development of technologies, as well as shared financial and operational risks. Crucially, these partnerships enhance the relevance and applicability of research by focusing on market needs earlier in development.
However, these partnerships are not without challenges. Negotiating intellectual property (IP) rights can be complex, as both parties seek to protect their interests. Also, aligning goals between public entities, who prioritize public good, and private companies, who are driven by profitability, can also present difficulties.
A good example is the partnership between NASA and SpaceX, which has proved hugely successful, but is not without its challenges. The combination of NASA's technological and research depth, combined with SpaceX's speed and commercial efficiency, has massively advanced space exploration in recent years. We now have reusable rockets!
Dual Use Applications
Technologies developed in federal labs often have dual-use applications, meaning they can serve both civilian and government purposes.
For example, a new material developed for space exploration might also have applications in manufacturing, healthcare, or consumer electronics. Leveraging the dual-use nature of these technologies can significantly enhance their commercial viability and societal benefit.
Dual-use technologies also hold strategic importance for national security and economic competitiveness. Their application for government purposes enhances the U.S. defense capabilities, while commercializing these technologies creates new markets, jobs, and industries, making the economy more dynamic and competitive globally.
A great example of this is Global Positioning System (GPS) technology. Originally developed in the 1960’s by the U.S. Department of Defense to track US submarines carrying nuclear missiles. Today, GPS technology has become foundational in our daily lives, enabling everything from car navigation to precision farming and smartphone location services.
Lab Spinouts
A spinout is a company that has been formed from a lab's research. Unlike licensing, where technology is permitted for use by another company, spinouts involve the creation of a whole new entity.
Spinouts are particularly interesting as they offer the lab an opportunity for higher returns. With a licensing agreement, labs typically get paid income, either upfront or a revenue share. However, with spinouts, the lab typically gets income and shares in the new entity. If the new entity goes on to exit, there is a potential for large returns and revenue for the lab.
While the prospect of forming a spinout is exciting, the path there has many challenges. It requires a blend of the right talent, sufficient capital, and deep knowledge to transition from lab research to a market-ready product.
This is where the magic of support systems, such as incubators and startup studios, comes into play. These ecosystems are designed to nurture and accelerate the growth of spinouts by:
Reducing Time to Market: By providing immediate access to business expertise, funding opportunities, and extensive market networks.
Mitigating Risk: Mentorship and resources available through incubators and startup studios help in de-risking this venture. They offer a safety net that encourages more scientists and entrepreneurs to take the leap into commercialization.
Commercial Focus: By embedding a commercial perspective from the outset, they ensure that innovations don't just remain brilliant ideas but transform into viable products that fulfill market demand.
Spinouts represent a vibrant pathway for innovations to make an impact on our world. The road there is long and demanding, but the rewards - both financial and societal - are huge!
Highway Ventures
Highway Ventures, is a startup studio that was launched for this exact reason, to support labs with their spin outs. We provide funding, talent access and commercial partners to increase the odds of success.
If you are a Tech Transfer Office or a researcher looking to commercialize your tech, get in touch!
