UW-Madison Chancellor Rebecca Blank, seen in this 2013 file photo, says she wants “a real step-up in ways we engage in the economic development agenda for the state.” Credit: Milwaukee Journal Sentinel files

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When Rebecca Blank arrived at the University of Wisconsin-Madison last summer, she became chancellor of one of the largest academic research universities in the world, but one that has an uneven track record for commercializing that work.

UW-Madison had nearly $1.2 billion in research spending yet launched only four start-ups in 2012, according to the Association of University Technology Managers. Blank wants to improve that performance and has a great opportunity in front of her.

As she settles into the job, Blank is overseeing the hiring of three key economic development leaders and a new university-driven commercialization effort. Blank says she wants "a real step-up in ways we engage in the economic development agenda for the state."

During a four-year stint as deputy U.S. commerce secretary, Blank says she learned that economically successful regions attract investment and industries by building partnerships between the public, private and educational sectors — and there is always a large research institution involved.

"The University of Wisconsin-Madison is that research center. It is the ideas factory and the innovation center for the state," Blank said. "It has got to be a partner with the state and with the private sector if we're going to attract the high-tech manufacturing, nutrition, software, health care businesses of the 21st century."

The key job openings Blank will have a hand in filling include director positions at the nascent Discovery to Product (D2P) initiative, organized to cultivate commercial products and create start-ups; the Office of Corporate Relations, whose mission is to help businesses and industry access university resources; and University Research Park, a sprawling area on Madison's west side that houses about 125 companies and continues to expand.

The latter two positions opened because of a promotion and a retirement, respectively.

But D2P is a new effort created to coordinate all of the entrepreneurial support programs across campus and develop university research with the most commercial promise. D2P is being funded initially with $3.2 million — half from UW-Madison, half from the Wisconsin Alumni Research Foundation, the patenting and licensing organization for the university — along with a $2.4 million economic development grant from the UW System.

Until now, UW-Madison had a passive process for turning research into commercial products or start-up companies, which forced faculty and staff to seek out services and assistance on their own, the university said in a grant proposal for the UW System money to create D2P.

In contrast, D2P will be proactive and bring together those services and assistance so ideas can be incubated longer on campus and ready to fund when they emerge, said Mark Cook, interim director of D2P. Cook is a UW-Madison animal sciences professor who has started three companies and licensed other inventions to industry.

"People are frustrated with the current climate and excited to have a fresh voice come into the university and promote an entrepreneurial culture — and they're excited the university has pooled some money and resources to jump-start that culture," said Bryan Renk, executive director of BioForward, the trade organization for Wisconsin's bioscience industry.

D2P will have four part-time mentors with experience in the start-up and venture worlds who have "one foot on campus and one in their day job," Cook said. Organizers are also working with the development group at UW-Madison's business school to connect alumni investors with the process, he said.

Beyond campus borders

The initiative is not intended to replace the Wisconsin Alumni Research Foundation, Blank said. Faculty who use federal research funding will still be required to do their patenting through WARF. But they might choose to go to D2P for help developing their idea.

"WARF is there to do patenting and licensing; they're not about trying to figure out what's commercializable and what's not," Blank said. "At the end of the day, it's the university's responsibility to make sure we're doing that outreach into the business community.

"Our responsibilities don't end at the borders of our campus. We have a responsibility to figure out whether these opportunities can be useful to the community around us."

It is always difficult for bureaucrats to justify taking a stake in a risky start-up with the promise of lucrative future licensing deals with big companies, said Paul Jones, co-chairman of the venture capital group at the law firm of Michael Best & Friedrich.

But such decisions often must be made for a university to forge start-ups. Right now, many financiers aren't as comfortable working with UW-Madison as they are working with other universities, Jones said.

"Hopefully this is a sign the university is saying, 'We can't get the money here alone, but we can make it easier for these groups to work with us the way they work with the more experienced universities, the familiar faces,'" Jones said.

Blank said she has no plans to try to tap the vast resources of partner organizations like WARF (with $2.4 billion in assets) and the University of Wisconsin Foundation ($2 billion in assets as of June),which are independent of the university.

However, she pointed out that some other universities — such as the University of Michigan, where she was once dean of the public policy school — are investing in technology commercialization.

"Michigan is 12, 15 years ahead of us. They've been working on this longer, particularly on the venture capital side," Blank said. The University of Michigan in 2011 committed $25 million from its endowment to fund its own start-up companies.

Research spending

UW-Madison's nearly $1.2 billion of research spending in 2012 ranked it sixth among academic institutions such as Johns Hopkins, the University of California System and the Massachusetts Institute of Technology, according to the Association of University Technology Managers, or AUTM.

But UW-Madison ranked 13th for licensing income in 2012 — 30th when adjusted by university research expenses and 40th when adjusted by the number of technology transfer office employees, according to a Brookings Institute report published in November.

And the university started just four companies in 2012, none of which WARF took a stake in, according to AUTM's data. By comparison, in that same year, with less than $700 million of research spending, Northwestern University created and took stakes in five start-ups.

The university's contributions, and those of University Research Park, are not "fully measured" in many of the statistics, Blank said. University Research Park is a critical part of the D2P plan, because it gives campus entrepreneurs a place to grow their businesses, she added.

Many top-performing universities are relying on partnerships with industry to help transfer technology into commercial products, according to The Burrill Report, a publication of San Francisco financial services firm Burrill & Co. UW-Madison received $23.2 million of its research spending from businesses in 2012, the second-lowest among the country's top 10 academic research institutions, according to AUTM.

Much of the commercialization at places like MIT, Carnegie Mellon and CalTech is coming out of partnerships with industry, Blank said.

"We have fewer of those partnerships than many of our peers. It's something I've been talking with our business school dean, with our engineering school dean, with our medical school dean about how do we step up those sorts of partnerships," Blank said.

Who has that 'inner fire'?

Observers say passion and accountability will be key to the success of D2P.

It's not enough to say that a technology has potential to be commercialized; someone has to have the passion to drive it to market, said Renk, of BioForward.

"If they don't have that inner fire to go, it's another exercise in making a yes/no decision on some technology," said Renk, who was previously a licensing manager at WARF.

There have been many programs over the last decade that have supported transferring UW-Madison's research into start-ups, but none has had much success, said Matthew Storms, an attorney at AlphaTech Counsel S.C., a Madison law firm focused on entrepreneurs and start-ups.

"There's a lot of excitement when they're initiated, but there isn't a whole lot of evaluation of the real success of the initiatives," Storms said. "I want to see the accountability associated with it."

D2P will aim to transfer four to seven technologies in the form of start-up companies or licenses to existing Wisconsin companies, and to create at least 20 new professional jobs during its first two years, organizers said in their grant application to the UW System.

The initiative is in its early stages, and the goals will be more concrete once there is a director to forge a three- to five-year strategic plan, Blank said. The long-term nature of the plan doesn't mean she has an abundance of patience.

"We should have gotten at this sooner," Blank said.

Three key economic development jobs are open at the University of Wisconsin-Madison:

Discovery to Product (D2P) director

Anticipated start date: March 1, 2014

Minimum salary: $90,000

Office of Corporate Relations director

Anticipated start date: Feb. 10, 2014

Minimum salary: $109,600

University Research Park director

Anticipated start date: May 19, 2014

Minimum salary: $176,000