Public university R&D: ‘I could cry’

• State of public university commercialisation stuck in a rut
• But govt still supporting various IP development measures

“I COULD cry.” That was the frank and heartfelt response from Dr Mohd Irwan Serigar Abdullah (pic), Secretary-General of the Ministry of Finance, when he was asked about the poor returns from the country’s efforts to get its public universities to commercialise their research and development (R&D).
 
Irwan was not speaking at a closed-door session but to some 300 audience members at the Global IP Valuation conference organised by Intellectual Property Corporation of Malaysia (MyIPO).
 
His frustration is evident as he talks about how the Malaysian Government has been trying to fill all the gaps that academics have pointed out as being the reasons for the very poor rate of commercialisation of their R&D.
 
It was in 2004 that the Government started demanding more market-based research from its public universities. This coincided with the appointment of Jamaludin Jarjis as the Minister of the newly-created Ministry of Science, Technology and Innovation. The minster’s mantra then was R&D&C, with the C referring to commercialisation.
 
It was the beginning of an uncomfortable period for all public sector academics who previously indulged in research with no practical market outcome.
 
The excuse given by public universities to Irwan in 2004 was that they had no Technology Licensing Offices or TLOs, as universities with strong commercial success in the United States and the United Kingdom had.
 
TLOs are units within universities that help bridge the gap between academics and industry, and make sure that the rights of academics are protected in any collaboration with industry.
 
They also act as trusted business and legal advisors to academics, besides helping academics assess if their R&D has any market potential.
 
“Go ahead, set them up,” Irwan encouraged. But even after the TLOs were established, he realised nothing had improved.
 
He said he again engaged with the universities and this time he was told that commercialisation was not easy to achieve. And he was told that there was still a missing link. “They said they needed to build pilot plants.”
 
Pilot plants are small scale plants built quickly and cheaply to make products that come out of R&D to prove that the products actually can do what they are meant to do, and for pilot customers to use them and provide market feedback.
  
“The Government agreed to provide the funds for this too, but still nothing came out of it,” bemoaned Irwan.
 
Apparently there was still another missing link – market research was needed to validate if the R&D would serve any need. Again, the Government gave the green light.
 
“So, we’ve given them the whole spectrum now,” said Irwan.
 
And yet, the results remain disappointing and nine years have passed since the R&D&C focus. Hence Irwan’s response to this commercialisation issue.
 
His own reading of why the needle had not moved centred on the perennial issue of poor implementation, with the second being that our universities work in silos.
 
Interestingly, this is where MaGIC or the Malaysian Global Innovation and Creativity Centre, comes into the picture.
 
First announced during the Global Entrepreneurship Summit (GES), this is envisioned as a one-stop centre to empower entrepreneurs.

But Irwan is also hoping for “MaGIC to be the starting point to bring the universities to start working [more closely] with each other and with entrepreneurs.”
 
It is an ambitious goal for MaGIC. Past efforts to get universities to work more closely with each other in R&D have been fiercely resisted and have failed.
 
But the Government is determined to push ahead to get public universities to commercialise their R&D, with Irwan pointing out that public universities will have to eventually generate 30% of their operating budget themselves and not rely on government funding.
 
While the Government is cranking up pressure on its universities to generate revenue, “but not by going into property development,” noted a bemused Irwan, it has been supportive of activities around the creation of intellectual property (IP).
 
As Irwan noted, IP creation is a critical facet of a developed economy and is an asset class that creative entrepreneurs can exploit. This year saw the creation of an Intellectual Property Financing Fund scheme amounting to RM200 million (US$63 million), offered through Malaysian Debt Ventures Bhd (MDV).

The Government will provide a 2% interest rate subsidy and a guarantee 50% of the IP rights value through the Credit Guarantee Corporation Malaysia Bhd. The balance 50% will have to be borne by banks.
 
Anticipating the need for highly skilled IP evaluators, RM19 million (US$6 million) has been set aside for training programmes conducted by MyIPO. The first batch has already graduated, with the second batch starting the three-month programme this month.
 
MyIPO has also received another RM90 million (US$28.3 million) to create a market platform for IP trading. The plan of how this will be executed is being finalised now.
 
Even Hong Kong is working on creating a similar platform. IP trading refers to the buying, selling and transferring of IP rights under mutually agreed terms and conditions.
 
IP trading may include acquisition and licensing of inventive patents, industrial designs, semiconductor designs, plant varieties, copyright works, trademarks for goods and services, trade secrets and more.
 
According to the Hong Kong IP Department, the IP trading business is typically supported by a range of IP intermediaries who add value to the transactions that may not be possible for direct trading.
 
Examples of IP intermediaries include consultants, brokers, conference organisers, valuers, financiers, agents, lawyers, mediators and arbitrators.
 
Irwan also hinted at the possibility of a new fund for entrepreneurs to tap when applying for IP. He cautioned the audience that this was just the seed of a conversation he is having with MyIPO. “I am not saying this will happen,” he cautioned.
 
But what will happen is an enhancement of current IP laws, with Irwan highlighting the need for entrepreneurs to be able to collateralise their IPs. Many of these developments will be carried out by MyIPO.
 
Their challenge will be to ensure the implementation is carried out flawlessly. That would put a smile on Irwan’s face and a bounce in his step.
 
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