Categorized | Organizations

Entrepreneurship and Wealth Creation Through Technology Transfer

by Dr. John Butler

Entrepreneurship and innovation has always been the source of employment, wealth and prosperity in market economies. Simply defined, an entrepreneur is someone who creates a new organization by generating resources to take an idea to market by utilizing the entrepreneurial process. This involves an understanding of legal, fundraising and financial issues, marketing, running the enterprise, and harvesting or selling the enterprise.

When one has an interest in entrepreneurship, one of the major factors is where to find an idea. The savvy person locates them by understanding business history, observing his or her workplace, reading entrepreneurial literature, understanding the movement of demographics, or simply trying to recreate an old idea that meets the everyday needs of individuals. Thus, one of the major questions people always ask is, “I’d like to do something myself, but where can I find an idea?”

Defining The Term

One of the most interesting and wealth-producing processes, in entrepreneurship is technology transfer. Sometimes called the commercialization of science, it involves moving the results of scientific research to the business world. This means that one doesn’t have to conceive of an idea, but rather the business application of an invention that has been created in public or private laboratories to solve a theoretical problem. Consider, for example, the many scientific inventions that allowed the combustion engine to replace the horse and carriage, the telephone to replace the telegraph, the computer to replace the typewriter, or the airplane to replace trains as a primary mode of transportation.  Technology transfer is the source of economist Joseph Schumpeter’s concept of creative destruction — new technologies actually disrupt or destroy current ways of doing things and existing business models. For the entrepreneur, technology transfer is a dynamic source of wealth creation, especially when a larger company purchases the new company. For larger firms, technology transfer is a way to enhance present products or create new lines.

At the very center of the technology transfer process are scientists and laboratories that produce new discoveries in the form of inventions. The labs   are found in the governmental, private and university sectors. Many of these organizations, especially university and governmental entities, have created an office of technology transfer, which facilitates the movement of new technologies from the laboratory to the market and manages the relationship between the organization, entrepreneurs, scientists, and new patent technologies.  Entrepreneurs who can successfully manage the transfer of knowledge can also be successful in wealth and job creation.

What makes technology transfer so interesting for the entrepreneur is the impact of the patent on the entire process. Learning to deal with the scientist or technology transfer manager becomes very important. When the scientific process creates new discoveries (machines, software, bio-inventions, etc,) the state issues the inventor exclusive rights to the product for a certain period of time. In the world of entrepreneurship, where venture financing is a key component, if the entrepreneur can license exclusive rights to a patent from the inventor or technology transfer manager; raising money for the new venture becomes less problematic. In addition, when information is contained in patents, all transactions tend to be a bit smoother, as opposed to ideas that are in individuals’ heads. What is important is that investors are more likely to invest in something new if the product is tied to an exclusive contract.

Laboratories are often places where ideas sit on the shelf, waiting to be scrutinized and transferred to the market. In MBA and undergraduate classes at the University of Texas at Austin and Babson College in Massachusetts, students no longer have to come up with an idea. Instead, the class revolves around students exploring technology sources that need to be commercialized, then producing a business plan that is centered on understanding the technology and where it fits into the market. Some Internet sights for technologies include , , and

Major Potential

Technology transfer has been one of the major produces of wealth and jobs internationally. Stateside, regions such as Silicon Valley, Route 128 in Boston, Austin, Texas, the Research Triangle in North Carolina, and San Diego have been the leaders in wealth creation through it. This has taken place where research academia, government, and the business world have combined to create innovative environments that enhance technology transfer. It includes law firms, business angles, venture capitalists and entrepreneurs who work together.

Technology transfer from laboratories has also historically created new industries and jobs. While president of Tuskegee Institute, Booker T. Washington hired agricultural chemist George Washington Carver. Through research on the peanut, Carver discovered hundreds of uses that enhanced the business world.  His scientific work had an impact on industries related to adhesives, ink, automobile paint, concrete, paper, plastic, and adhesives.

If interested in technology transfer, it’s first necessary to read the literature and understand how it is done. A number of universities offer courses in it. Also, check governmental labs for ideas that need to be commercialized. The basic question to ask yourself is always the same: How can that science be converted to products and commercialized in the market? Answer that, and the process can begin.

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