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Updated: September 2, 2019

UConn president’s ambitious goal to boost entrepreneurship, double research funding faces hurdles

HBJ Photo | Sean Teehan UConn President Thomas Katsouleas addresses the university’s board of trustees at an August meeting.

In August, UConn’s board of trustees held its first meeting attended by new University of Connecticut President Thomas Katsouleas.

Much of the meeting consisted of housekeeping issues like reviewing the university’s ethics policy, but at least one agenda item was right up Katsouleas’ ally: the formation of an entrepreneurship advisory committee.

The former University of Virginia executive vice president and provost took UConn’s corner office with the support of Gov. Ned Lamont and the understanding that as president he would pump up the school’s research funding and entrepreneurship programs. If Katsouleas has his way, his tenure will put UConn on a path to becoming a higher-education mecca for innovators looking to advance research, make discoveries and commercialize those inventions.

“We’d like to build this out so that if someone’s interested in entrepreneurship, they have a curricular path forward to pursue entrepreneurship and have … experiential learning,” Katsouleas said in an interview after the Aug. 14 board meeting, adding that if graduate students making discoveries in labs had access to support in monetizing them, UConn would be “leapfrogging our peers, and bringing an advantage to our students at UConn.”

In some ways, UConn is in a prime position to become an East Coast answer to the Silicon Valley-adjacent Stanford University, and to give its northern neighbor MIT a run for its money when it comes to midwifing new, innovative companies born on campus.

The school already has some significant research-and-development infrastructure and the state legislature is also on-board, having passed a law earlier this year requiring the university to expand entrepreneurship.

But the plan has a major hurdle with no clear solution: A multibillion-dollar unfunded pension liability that makes UConn a more expensive place for entrepreneurs to base their operations compared to other research universities. This year, the pension liability amounts to $52 million between UConn and UConn Health, but that number fluctuates annually based on retirements, retiree deaths and other liabilities that the pension system must fund, a UConn spokeswoman said.

Time will tell exactly how much of an impediment the pension liability will be to Katsouleas’ vision.

But for now, the new president, faculty handling entrepreneurship programs and startup staffers working out of UConn incubators seem intent on building up the school’s current research and startup resources, while hoping the pension liability situation is solved. Somehow.

UConn’s nationwide standing

Katsouleas’ objective is to double annual research funding in the next 10 years from about $265 million to $500 million.

UConn Vice President of Research Radenka Maric said that will translate into more innovation and entrepreneurial activities, because once research dollars increase so does innovation.

There is data to back that up. Schools expect one patent issued per $2 million in research funding.

Universities have always been major sources of science and technology innovation, but there has been increasing pressure to turn ideas into practical uses that create new businesses and jobs.

“Silicon Valley” and the “North Carolina Triangle” have become model examples. In Connecticut, Yale University and its Science Park is the benchmark.

UConn has raised its profile over the last few decades as a research institution, spending billions of dollars to boost its R&D infrastructure, including adding new lab space and technology buildings, and expanding its engineering department and enrollment as well as entrepreneurial education for undergrads.

That’s translated into more research dollars and economic activity.

In 2017, UConn reported $184 million in total research expenditures, which was up 28 percent from a decade earlier, according to a recent survey by the Association of University Technology Managers (AUTM).

In 2017, the school also generated 46 patents, 45 new patent applications and three new startups, the AUTM survey found.

The school also averages about 87 active licenses annually.

However, UConn is still far behind much larger research schools. For example, Stanford had over $1 billion in research expenditures in 2017 and $45 million in license revenue, while MIT recorded $1.7 billion in research expenditures and $33 million in license revenue that year.

Katsouleas is currently fleshing out a number of specific proposals to propel UConn’s entrepreneurship programs, but he’s not yet ready to reveal them publicly, a spokeswoman said.

Maric, who supports Katsouleas’ vision, said she thinks the school should increase its focus on building alumni networks, develop a faculty “commercialization orientation” and evaluate every faculty research discovery for startup potential.

Tech and entrepreneurship

Among UConn’s latest efforts to boost its research profile was the establishment of the Peter J. Werth Institute for Entrepreneurship and Innovation.

If was formed after Peter J. Werth, a philanthropist and founder of generic drug company ChemWerth Inc., donated $22.5 million two years ago to the UConn Foundation, the university’s philanthropic arm, to pay for innovation and entrepreneurial programs.

“We’re about creating entrepreneurs and giving students opportunities to learn and experience things that will help them become a better entrepreneur some day,” said David Noble, the institute’s director. “We focus more on creating entrepreneurs than creating companies.”

The institute isn’t part of any particular academic discipline, and only reports to the provost, Noble said. That gives Noble wide latitude to sponsor entrepreneurship programs with ties to many different fields of study. For now, Noble said, the institute is preparing to launch a slate of core curriculum and elective entrepreneurship courses this fall.

And according to AUTM data, UConn’s invention and startup output is better than average.

For example, one of the metrics AUTM CEO Stephen Susalka uses to judge the efficacy of entrepreneurship programs is the amount of money spent per invention. Between 2015 and 2017, UConn spent $540.8 million and produced 223 inventions, which comes out to $2.4 million per invention. That’s slightly better than the national average of $2.7 million, Susalka said.

“They’re clearly doing very well with what they have,” Susalka said, noting the university also produced an average of three companies per year during that three-year time period. “All in all UConn seems to be very strong.”

Photo | HBJ File
Nicole Wagner, chief executive of UConn spinoff company, LambdaVision.

From the classroom to the lab

About 35 miles from the Storrs campus stands UConn’s Technology Incubator Program in Farmington, where more than 30 tech startups work at building their companies.

One of those is LambdaVision, a UConn spinoff founded in 2009 based on discoveries made in a professor’s lab, said Nicole Wagner, the company’s chief executive, who was a Ph.D. student in LambdaVision’s early days. The company uses proteins discovered in the research lab to build retina implants that fight blindness.

“I think some of the ways that UConn has supported us has been through in-kind support,” Wagner said. “Mentors, business advisors, people to help us with coming up with business plans.”

UConn also is home to Tech Transfer & Venture Development, which aims to streamline the process of turning lab discoveries into products.

But even though resources exist at UConn, the pension liabilities make it more expensive to hire graduate assistants, said Michael Bailey, executive director of UConn’s branch of the American Association of University Professors (AAUP).

“When a current faculty member has an opportunity to use research grant money that he’s received to hire people, he [must] hire fewer people, because of the high cost of labor,” Bailey said. “That hurts the amount of research that the faculty can produce,” and hinders outside entrepreneurs looking for a homebase.

Further, doubling research funding could be a difficult feat, Susalka said, since so much research at universities has historically been funded by federal grants.

“Probably the big challenge in doubling research … is the percentage of dollars coming from the federal government has been steadily decreasing,” Susalka said.

Tom Peters, a professor of computer science, engineering and math, also warns against putting too much stock in Katsouleas’ vision taking shape anytime soon. Peters came to UConn by way of the entrepreneurial world — he served as chief technology officer at a West Cost startup, and spent time working in MIT’s Draper Lab.

Peters said that in addition to the pension problem, stakeholders who seem gung-ho about the next big company coming out of UConn might be expecting quick results from an innovation process that’s often slow to produce anything.

“These things don’t come easily,” said Peters, who added he supports the school’s entrepreneurship efforts. “There’s a lot of failure, and there is a lot of time, and a fair amount of investment that’s necessary to make those work.”

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