Seeds of growth:
Book describes sharp upturn in high-tech firms
From compounds for gene therapy to promising new drugs for treating cancer and osteoporosis, the commercial prodigies of the university's research enterprise have altered the state's economic landscape, creating jobs and wealth that rival the contributions of Wisconsin's most important industries.
Technology transfer -- whether in the form of patents, companies spun off of university laboratories or products or processes that are the result of faculty invention -- is nothing new at UW-Madison, having taken place in one form or another for more than 100 years.
But over the past 40 years, the phenomenon has blossomed into what may be the state's biggest single source of high-tech companies, according to a new study published by the Office of University-Industry Relations. Moreover, the rate of growth of UW-Madison-inspired companies reflected in the study has increased sharply over the past 15 years with an average of 13 new firms being founded each year for the last five years.
"This is a significant growth rate. The question is, can we sustain it and what can we do to encourage those companies to grow," says Philip Z. Sobocinski, the author of the study released this month in the form of a book, "Creating High-Tech Business Growth in Wisconsin."
The book documents the rise of university technology transfer as an economic force in Wisconsin, dissecting the complicated process of moving ideas from the lab to the private sector. Moreover, it provides intriguing profiles of 178 state companies that sprang from the fertile minds of university faculty, staff, students and alumni.
Some of the companies, like Red Dot Foods, are long gone, bought up by competitors, but many have demonstrated remarkable staying power and others, especially those in the area of biotechnology, are poised to become economic forces that promise to shape the state's economy for the next 100 years.
The new book from UIR provides the most insightful and complete picture of the technology transfer enterprise at the state's largest research institution, according to Provost John Wiley: "Moving ideas and new knowledge from university laboratories to the private sector is no longer a side show. It is a routine part of the way we do business now, and this study provides ample documentation that we're doing it very well."
Wiley says Sobocinski's book is a valuable, outstanding work that helps to better depict the full scope of research at a modern university. "Not everyone could do something like this," he said. "We're fortunate to have someone who knows the university research landscape so well, and how that all feeds into the private sector where the research can be developed into products and processes that benefit society."
Sobocinski is an associate director of UIR and a well-connected observer of the movement of new technology from the lab to the private sector. His observations, backed by impressive sources of data and careful statistical analysis, portray an economic force that is born in the seemingly arcane and impenetrable world of basic academic science. What Sobocinski's analysis shows, in fact, is an accelerating trend of convergence, with basic science increasingly fueling our economic well being and shaping many critical industries, new and old.
"It all starts with basic research," says Sobocinski. "It's the wellspring of knowledge" and its influence on our modern economy is undeniable.
Take, for example, the world of vitamins. One hundred years ago vitamins were unknown. Following their discovery at UW-Madison and elsewhere, industry was quick to capitalize on the new knowledge to fortify foods and, in the process, eliminate a raft of common diseases that were the result of diets deficient in vitamins.
Today at UW-Madison, scientists like biochemist Hector DeLuca continue to pry loose the secrets of vitamins. From DeLuca's lab alone, a flood of discoveries related to vitamin D has yielded not only new drugs to treat such diseases as osteoporosis, psoriasis and cancer, but also more than 150 patents and two Wisconsin spin-off companies, Bone Care International, Inc. and Tetrionics, Inc.
It is companies like these, according to Sobocinski's study, that now employ nearly 7,000 people in Wisconsin in high-paying, technically demanding jobs. That number, says Sobocinski, could grow dramatically in the next few years as Wisconsin's biotechnology industry matures and some companies experience dramatic, near exponential growth.
Growth comes so quickly, notes Sobocinski, that between the completion of his study and the publication of the book, six new companies with ties to UW-Madison have been founded. Another intriguing finding of the study, he says, is that the failure rate of new technology-based firms in Wisconsin is extremely low.
Most organizations reflected in the new UIR study are in Dane County, but some have evolved in places such as Rhinelander, Port Washington, Milwaukee and Sauk City. Dane County is a high-tech cradle, according to Sobocinski, because it has in place the key components of a high-tech infrastructure -- outstanding centers of research, research parks, research and development capital, patent attorneys, incubators and, importantly, an entrepreneurial climate and a steady flow of qualified employees from UW-Madison and other academic institutions.
Despite a generally rosy picture, Wisconsin needs to bolster its efforts to both create and further develop technology-based companies. For example, Sobocinski cites a chronic shortage of venture capital as well as high-tech management personnel.
Moreover, players in the game need to focus on the development of existing companies with the hope of creating, in tech-transfer lingo, "gazelles," companies that shake off their start-up chains and grow by leaps and bounds.
"The book is just a snapshot in time," says Sobocinski. "It shows where we are and current trends. But the hope is it will also provide a road map to where we should be going."
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