Surprised? Two Israelis are leading the Technology Transfer Offices of HARVARD and UCLA

Technology Transfer Offices (or TTOs) are for-profit companies, owned by the universities. They are handling universities IP and are responsible for its commercialization, following the university’s policy.

Israel has turned technology transfer from academic laboratory to the market into a prosperous industry.

The fact that the Directors of two of the leading Israeli TTOs have been hired by HARVARD and UCLA speaks for itself.

Tech Transfer “Mercato”

The former CEO of Tel Aviv University’s RAMOT tech transfer organization - Isaac Kohlberg - had been hired by Harvard back in 2006 and is still managing the commercialization arm of the University.

Similarly, two years ago UCLA grabbed Amir Naiber, who headed for 10 years YEDA, the Weizmann Institute tech transfer company.

From Copaxone to Mobileye: tech transfer home runs

The Weizmann Institute, Israel’s top research institution, is known for its blockbuster scientific discoveries which led to some phenomenal business success stories. First and foremost is Copaxone, the blockbuster (more than $20 billions in sales!) treatment for multiple sclerosis produced by Teva - Yeda reportedly earned 8-9% on Copaxone's sales, amounting to around $2 billion.

Among many other blockbusters is an encryption method developed by Prof. Adi Shamir, which underpins the technology of NDS, eventually acquired for $5 billion by Cisco in 2014.

Mobileye and Intel CEOs at the time of the acquisition by Intel for a record $15.3 billion. Mobileye’s core IP was transferred from the Hebrew University of Jerusalem. Photo by Tiernan Ray

When one looks at American and Israeli academic research institutions, the gap between the two scenes is quite overwhelming. In fact, the combined research budget of all Israeli universities is only half the research budget of MIT.

The Technion’s net research budget of roughly $121 million in 2018 pales in comparison to MIT’s $1.5 billion.

On the other hand, ‘’MIT and Technion’s income from IP commercialization are similar” (around $31M for the Technion in 2018), said Benjamin Soffer the Chairman of Israel Tech Transfer Network (ITTN). One explanation lies in research budget efficiency. Fellowships paid to graduate and doctoral students for their research work is three times higher in the top American than in the Israeli universities. In other words, at equivalent research budgets, the Israelis can fund the work of three times more researchers that the American.

Israeli TTOs are second to the US in terms of revenues from IP sales.

The Weizmann Institute complete financial statements shows that it received nearly $ 2.6 billion in royalties over the period 2011-2017. Nearly $1 billion of this went into the pockets of the relevant scientists. (source: The Marker, Dec. 5, 2017)

With a remarkable track record for generating more revenue from IP sales than any other country, after the US, Israel is a role model.

The fact that two of the world best universities such has Harvard and UCLA have chosen veteran Israelis for managing their tech transfer offices is nothing but the validation of Israel’s leading position in this challenging field. Many universities are looking up to their Israeli counterparts in a quest to replicate yet another of the Start-Up Nation miracles.

So is there an Israeli Tech Transfer secret sauce?

Most of the 16 currently operating Israeli TTOs share some common and unique traits. They have a very lean organizational structure, creating one single point of contact for the researchers and the industry, which is rarely the case in other countries. Israeli universities are also very proactive in engaging with the industries - they are exceptionally outgoing and manage to create strong ties with companies willing to advance their inventions.

Recipe, step by step:

1. First of all, you need to increase the level of openness of the researchers to commercialization.

2. Convince the academic administration accept the idea that the faster the technology gets out of university the best it is. Not the contrary.

3. Establish a dialogue between the industrial players looking for solutions and the academic researchers that have developed technologies but are still looking for a problem that needs to get solved.

4. The critical importance of involving seasoned entrepreneurs in the process. The Technion has built EIR, the Entrepreneur in Residence program, whereby it tries to engage an experienced entrepreneur with a very strong technology, and use such entrepreneurs as agents of the marketplace within the campus of the Technion.

5. Find the good governance for the Tech Transfer Office (TTO) versus the University management.

6. Be Patient. A product can take 10 years and for a drug even 20 years to reach its market. The University is a patient investor as compared to VC who have 5-7 years cycles. The University must be ready to take high risk. Tech Transfer is a “lottery business,” according to Benjamin Soffer, Manager of T3, the commercialization arm of the Technion. “You never know which technology will actually make the difference,” he says, “so you try to buy as many tickets as possible.”

7. Two approaches. One which tries to extract the most economic value from every deal. And the other which tries to do as many deals as possible.

Is Tech Transfer declining?

It is said that the concept of Technology transfer was born at the University of Wisconsin in 1925. But the Weizmann Institute disrupted it at the end of the 50s, followed by the Hebrew University of Jerusalem’s Yissum Research Development Company in 1964.

Together with other Israeli institutes, they've turned it into an art.

Data from 2011 shows that Israeli TTOs generate over 1B NIS in annual royalties, with about 150 new technologies licensed from universities and research institutes each year. From the same AUTM (The Association of University Technology Managers) survey, Yissum and Yeda are ranked in the TOP 10 tech transfer companies worldwide in terms of revenue. Yeda proudly holds the title of the highest income per researcher worldwide.

This appealing picture of Israeli research institutions leading the pack of technology transfer successes shouldn’t be taken for granted. According to a report published by the Israeli economic journal Calcalist last year, the revenue generated from Israeli TTOs are declining.

As seen in the graph above from the Israeli Central Bureau of Statistics, the revenue generated from Israeli Universities’ TTOs (in million NIS) are experiencing constant decline since 2012.

With the always increasing pace of technological innovations and scientific discoveries, Israel shall maintain its leadership in Technology Transfer, one of the main engines driving the Israeli Start-Up Nation.