By guest authors Irina Patterson and Candice Arnold
Jim: There’re probably 600 or 700 federal laboratories, and as I said, their annual research budget is $150 billion.
As part of that, there are a number of laws on the books that require the federal laboratories to transfer technology into the commercial, private sector. There are laws that have been around for 20-odd years.
So, what happens is that a federal laboratory may develop a technology for itself, its own purpose, but they have tech transfer officers whose job it is to say, “Now, wait a minute. Where is the place that this might be able to go into the marketplace?” What we’re trying to do is be a catalyst in some federal laboratories to assist in that process.
Irina: What is the usual process? Do they have databases of these technologies?
Jim: That’s correct. If you want to look this up, there is a website for Federal Labs Consortium (The Federal Laboratory Consortium for Technology Transfer or FLC), which is a government-funded activity.
On that site, you can see all the laboratories that I’m talking about. If you have a particular interest, you can go to a website for a contractor under this and find out what their technologies are. Then, if there’s a technology that appeals to you, you can go and find out how to license it in some fashion.
Irina: And that can be the catalyst for entrepreneurship?
Jim: Absolutely. Many entrepreneurs are unfamiliar with this as an opportunity.
Irina: Are there any other programs or initiatives that you think could help build a sustainable entrepreneurial ecosystem?
Jim: Well, one of the big issues that relates to all of this, the question that comes up all the time, has to do with job creation. You know, a number of studies out there that show how seed investing, early stage investing does create jobs.
I’ll give you a couple statistics that might help you understand this. When the stimulus bill was passed, it was $800 billion for what was supposed to create four million jobs. If you divide one into the other, what you find is that the cost per job is about $200,000.
A number of studies out there show that seed investing in new technologies creates jobs, and the cost per job ranges from $10,000 to $25,000 or $30,000 per job, maybe a tenth of what the stimulus bill was.
So, we are very interested in communicating through our members to their representatives in Congress how this really works and how jobs do get created when you have small startup businesses.
Our organization is not focused on East Coast and West Coast. For example, our annual conferences are never held in Silicon Valley or in Boston. The reason is that we feel very strongly that the middle of the country does not get enough attention in terms of seed investment. Now, of course, there’re lots of money and lots of people in Silicon Valley and in Boston and around MIT and so on. We think there’s an enormous untapped resource outside of this area and that’s one of the places we focus on, friends in Utah, New Mexico, and Minnesota and so on.
We call those the fly-over states, you know, the ones that are tough to get to. Everybody can go to Boston or San Francisco. But not everybody goes to the places where our members are, and we think that we can really do something for them.
Irina: Do you also work with the SBA office?
Jim: Absolutely. We’re very interested. The Small Business Administration manages the SBIR (Small Business Innovation Research) program, or many aspects of it, which is one way that small businesses do get funding.
Irina: I know your focus is seed funding, but do you think that there’s anything else that could help entrepreneurs? Let’s talk about incubators.
Jim: I’ve been on the board of the National Business Incubator Association because I think there are many similarities between what they do and what we’re trying to do. I think a part of the message that needs to get out about incubators – and they are doing this, by the way, but not in every place – is the recognition that incubators are not a real estate issue but a tech transfer issue.
Anything that can be done to encourage incubator managers to realize that the measure of success is not 98% occupancy but rather how technologies are developed and brought to commercialization. That can be very helpful, too.