Espacios. Vol. 34 (2) 2013. Pág. 10

Agencing technology transferring in emerging country

Agenciamento transferência de tecnologia em país emergente

Leonel Cezar Rodrigues 1, Antonio Lobosco 2 , Celso Machado 3 y Marcelo Scorsato De Rosa 4

Recibido: 18-05-2012 - Aprobado: 15-10-2012


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The near absence of R&D in national companies transforms Brazilian universities in an important cognitive basis and a superior technology innovation supplier. Brazilian university, however, run under the academic departments' premises, which give them a typical internalist operating model (Stankiewicz, 1986). The internalist operating model run into a problem of transferring technology. An effective alternative could be Agency technologies. This article explores the role of USP Innovation Agency, at University of São Paulo, as a supporting mechanism to transfer innovations. Characteristics of the Agency to access market technological demands and to stimulate science driven innovations are explored. Conclusively, agencing technologies and innovation mechanisms to industry would be the ideal role in the context of emerging countries. Structurally, the Agency does not bind to the university departments, runs under an independent budget and is managed by specialists. Strategically, the Agency maintains focus on critical processes of technology transfer, spends special attention to strategic alignment to businesses and to academic processes and norms, in addition to operational effectiveness. Strategic and structural elements seem to be the main responsible for the Agency's singular performance, which helps consolidate technological dominion of national companies and directly contribute to build the economic development of the country.
Keywords: innovation; technology transferring; technology agency; university-industry; emerging country.


La ausencia casi total de I + D en las empresas nacionales transforma universidades brasileñas en una importante base cognitiva y un proveedor de la innovación tecnológica superior. La Universidad brasileña, sin embargo, se estructuran en los departamentos académicos ", que les dan un modelo internalista típico de funcionamiento (Stankiewicz, 1986). El modelo operativo internalista apresenta un problema de transferencia de tecnología. Una alternativa efectiva podría ser la Agencia de Tecnologia. Este artículo explora el papel de la Agencia de Innovación de la USP, la Universidad de São Paulo, como un mecanismo de apoyo a la transferencia de las innovaciones. Exploran-se las características de la Agencia para acceder a las demandas del mercado y estimular las innovaciones impulsadas por la ciencia. En conclusión, agenciar tecnologías y innovación a la industria sería el papel ideal en el contexto de los países emergentes. Estructuralmente, la Agencia no se une a los departamentos universitarios, se ejecuta con un presupuesto independiente y está gestionado por especialistas. Estratégicamente, la Agencia mantiene el foco en los procesos críticos de la transferencia de tecnología, gasta especial atención a la alineación estratégica de las empresas, a los procesos académicos y las normas, además de la eficacia operativa. Elementos estratégicos y estructurales parecen ser el principal responsable para la performance singular de la Agencia, lo que ayuda a consolidar el dominio tecnológico de las empresas nacionales y contribuyen directamente a crear el desarrollo económico del país

1. Introduction

In the 1990s the world economic scenario establishes a new reality for developing countries, especially for Brazil, a leading nation among emerging countries. The reason is for most of them, that decade inaugurated an age with emphasis on international trade and economic liberalization. The fall of protective economic barriers and the obedience to the world economic conjuncture required, from then on, the adoption of new patterns of competition for those countries.  Now, technological domain assumes important role, curbing competitive strategies of corporations, instead of simply operational effectiveness. This challenge is a long run process that affects the corporate and the country strategies to increase competitiveness.

Developing countries, such as Brazil, do not show tradition in research, development and innovation. Therefore, it holds an additional hurdle to its development and competitiveness: the challenge to create and consolidate a technological base within corporations located in the country.  However, the way to growth, of the corporations and the nation, undergoes the same challenges that international companies face, that is, to find faster and diversified ways to innovate. This context demands from domestic firms, greater agility to expand and consolidate their own technology dominion and from the country, effective mechanisms to develop and transfer technologies and innovations. The way to cut short is, doubtless, the combination of internal resources with external sources of innovation.

The increasing tightening of products, technologies and markets life cycles affects national companies, as aggravating factors of their already battered technological dominion. In the 1990’s, the first movements were taken, in academia and industry, toward the proposition of models, tools and mechanisms to increase the access and speed to incorporate innovations. Among the distinct models of management of innovation, combining external and internal sources, we could list, exploration and exploitation processes; user innovation process; and more recently, open innovation.

All models to explore external sources of innovation will work properly, depending on the specific context and needs.  So, it seems that any of these models will work fine in the context of emerging countries, like Brazil. However, open innovation model is receiving special attention from academia and industry, as a superior alternative to increase the speed of access and incorporation of technological innovations.

On the other hand, the near absence of research and development in companies located in Brazil, transform its universities in an important cognitive basis and a superior technology innovation supplier.  Its important to consider that universities constitute a major source of research and development in the country. The problem with the Brazilian universities is that, in most cases, they are structured under the academic departments’ premises, which give them a typical internalist operating structure (Stankiewicz, 1986). Internalist structures are useful mostly for teaching purposes. I addition to how weak or inefficient support to research, the internalist structures are not adherent to the transferring of technology and do little to stimulate integration with the business environment.

An alternative to this model are the externalist structures (Stankiewicz, 1986), where organizations and mechanisms external to the department concentrate primarily on the development and transfer of technology. In Brazil, as pointed out, the main source of cognitive research and technological development is located in research universities. Research universities, thus, produce and storage technology, but not run it off effectively. This fact mainly limits the transfer of technology, but not necessarily prevents its realization. Thus, the use of mechanisms not linked to departments, for technology transfer, could be a viable solution. These mechanisms could simplify and accelerate the technology transferring process, provided they satisfied certain requirements, such as no subservience to the departments, focus on the transferring process, strategic alignment to the academic and business processes and operating efficiency (Stankiewicz, 1986). Rodrigues and Tontini (1997) have already pointed the problem of technology transfer in the context of emerging countries. They propose a model based on four institutional functions: knowledge generation, knowledge transfer, competences transfer by surplus through extension, and technology transfer. In Brazil, while the three first functions apparently progressed satisfactorily in the context of research universities, technology transfer still faces huge challenges to become effective, precisely because of the existing internalist academic structures in universities.

If the externalist model of structuring universities is en efficient solution to deal with issues of low effectiveness in the interface university-industry, then one mean, recognized for its effectiveness to increase technology transfer, is innovation agencies. Innovation Agencies are specialized organizations in the business of transferring technologies. Their effectiveness as a mediating organization between U-I relations is due to their disconnected structure from the educational/research system. They are focused mainly on the technology transferring process. This article, thus, explores the role and function of the Research Agency of the University of São Paulo - USP Innovation Agency - established with the specific aim of supporting the transfer of technological innovations, generated by USP’s attachments.  Here we explore the characteristics and strategies of this Innovation Agency that turn into an effective cognitive base for external access of capabilities and innovations of the University and into an effective instrument adjusted to the context of the economic development needs of an emerging country.

The choice of USP Innovation Agency is due to the higher representativeness of USP in the academic context of Brazil and Latin America.  USP is the most intellectually and technologically productive university in the country.  It also ranks first among Latin American universities in the world ranking of universities of Time Higher Education, 2010. The study evaluates, in an exploratory way, the performance of the Agency, looking at internal structures, external relationships, marketing strategies and intermediating strategies for licensing, stimuli to entrepreneurship and fitness of technologies to market needs.

2. Theoretical Framework

The pioneering studies of Schumpeter have pointed the importance of innovation in the process of economic development (Schumpeter, 2010). This approach was extended to the context of nations where technologies application domains are so large and where technologies roles are so critical, that determine the patterns of technical change. To a large extent, these technologies determine the national capacity to dominate the production, imitation and innovation in specific areas considered strategic to them. For Dosi et al. (1994) the linkages between productive activities involve hierarchies structured through which the most dynamic technological paradigms play an essential role as sources of technological competences. Such abilities play a central role in the development of the country. These core technologies shape the general competitive advantages and disadvantages of each country.

The core technologies of a country could originate from its natural features that have been forged its technological context. It can also originate from planned and intended actions. If this is an acceptable course of actions, developing countries should hold a framework of resources that can be used to accelerate its technological development. This framework refers to the industrial policies and to a selected technological development model.

In developing countries, the financial and technical mechanisms that support research and development are concentrated almost exclusively on government agencies and research universities (Rodrigues & Tontini, 1992). This is a contingency that restricts the transfer of technology for several reasons, among them, the disparate goals of universities and industry. Additionally, the volume, diversity and specificity of the technologies developed at these institutions are insufficient to feed at the necessary speed, the technological demands of enterprises in these countries. Finally, transfer of technology generated in universities is still limited, whether by structural contingencies, cultural factors, or by means of lack of mechanisms that would work effectively within the dynamics of technology transferring

The restrictive context of technology transfer from universities to businesses is also addressed by several authors (Santos & Solleiro, 2006; Schartinger et al. 2002). This issue is widely studied in the literature as the 'university-industry cooperation’. Generally, a university-industry cooperation can be defined as the interactions, direct or indirect, that focus on knowledge production and transfer it from universities / research institutes to industry or groups of enterprises. This framework of interactions links the basic to the applied research and to the technological development, enhancing the technical and scientific development of the business partners involved (Schartinger et al. 2002; Mora-Valentin et al., 2004).

The appropriation, therefore, of organizational structures in universities, has been the subject of wide discussion among experts. As they structure themselves as centers of technology transfer, universities tried to use systems that do not change much their original structure, dedicated to support the teaching of professions. One of these is the internalist structure. The other one is the externalist (Stankiewicz, 1986).

2.1. University structures to technology transferring

Structural changes with impact on the effectiveness of the university as a research center are very recent (Stankiewicz, 1986). For example, scientific research, as seen today, was fully incorporated in the university not more than a century ago. And the concept that universities should be the source of research and development (R & D) of a nation is even more recent, starting only around the middle of last century. These facts have required from the university, especially those of emerging countries, a constant readjustment to her environment. Apart from external pressures, originated in the demands for research and development, the gradual sophistication of the systems and mechanisms for R & D at universities pushed its structure into becoming a permanent evolutionary system. Internal pressures resulting from dichotomies such as the new versus the old disciplines, natural sciences versus humanities, and specialist versus generalist education, has required constant institutional redefinition and a statement of philosophical principles that are always in conflict.

Other sources of development that prompted the university to adapt to the demands of the society it serves come from the technical-vocational orientation of the university, that is, the conflicts of teaching versus research. In this regard, as an evolutionary system, the university adapted itself into three major ways, to avoid functional overload. One was specialization. The other was internal diversification. And the third one was hybridization, a combination of the first two.

The evolution of specialization was the result of knowledge specialized classification for its more efficient transmission. In this way, the university is structured according to a view of internalist functions, where knowledge classification determines the institutional structure according to academic departments. Shapero (l979) explains to what an internalist structure of a university refers to. As centerpieces and basic cell of the institution, departments are the ultimate responsible for accomplishment of goals and objectives of the teaching of professions in the university. As departments are academic in nature they become less flexible to deal with matters other than teaching, would divert them from academic functions of knowledge transmission. At most, they may admit to perform basic research, as a support to expand its fundamental knowledge base. Other functions associated with research, such as technology development, extension and transfer, even if linked to the nature of the university, would deviate her from its institutional function and would be neglected. This conception seems to be incorporated by most higher education institutions (HEI) in Brazil, in an empirical evaluation of its constitution.

A second concept is oriented towards externalist solutions. Under this concept, there is a clear separation between the academic activities (compatible and carried out within departments) and the development activities, (held outside of the departments) (Baldwin, l986; Dickson, l988; Bok, 2003). Thus, the tensions caused by activities of distinct nature from that of the academic department cease to disturb. The research results would be transferred more quickly to society, expanding the use and supplementing a better mission accomplishment of the university. In externalist structures, there is a set of mechanisms external to the academic departments, such as institutes of research and development, which support the production of research, technology and its transfer to society (Zemsky, 2005).

In a third design of the university we find the integrationist structure (Abetti et al., 1986). In this design, the production of science and technology is the origin of the institution, not the education system. The integrationist structure does not support the university essentially as a center of teaching and  learning, originated according the education system concept, but as a research and development center, that uses the academic system as a recipient to its research production, or as a recipient of its exceeding capacity of research and development. The integrationist design, in emerging countries, is extremely rare and if exits it is incipient, since by definition, the integrationist profile requires superior expertise of research and development teams and a historical experience of repressed specialist capability.

In emerging countries, the most common pattern of universities’ structure is the internalist. As indicated above, however, this pattern is not conducive to the efficient flow of technologies to industry. It is in the context for these patterns that we advocate the agencing of technology to transfer to industry, as an effictive solution.

2.2. Agencing Technology Transferring

For technology transfer from research institutions to industry it is crucial to establish liaisons mechanisms between the recipients (entrepreneur / company) of the technology and the knowledge / technology suppliers (scientists / universities) with instruments that address the interests and behavioral patterns of both groups (Barnes, et al. 2002; Siegel et al., 2003). Before we discuss the mechanisms of agencies of technology transfer, it is important to discuss the conceptual foundation of the agency theory.

Agency theory

The theory of agency emerged in the 1970s as a result of adaptation movements of management structures in large corporations, which have grown to huge sizes since de 1960s decade (Alchian-Demsetz, 1972). Indeed, the evolution of corporations, as they grow and increase complexity of management, requires the delegation of activities to people other than its owner. The delegation of duties and right to decision making, involves stipulation of activities, decision limits, accountability for decisions and performance. The delegation of functions and authority is in fact the principle of agency. On the one hand, the owners of a company and the shareholders (both called Principal) need to defend their interests in the company. On the other hand, hired professionals (called the Agents) need to perform their duties well, so that the company would have a good performance. Not always the interests of the principals and the agents are coincident, allowing a condition for potential conflicts (Eisenhardt, 1989). The agency theory explains how such conflicts can be managed and mitigated through control rules, mutual responsibility (accountability) and contracts of agency (Jensen & Meckling, 1976). Thus, the agency, that is, the delegation of activities and functions to professionals and executives accountable, under contract, for the good performance of companies is now seen as the best way to manage companies efficiently. The theory of agency, therefore, explains the contractual relations between members of an organization, considering the motivation and interests of each participant (Jensen & Meckling, 1976).

Agency concepts

Despite the issues arising in the relations between owners and professional staff with the responsibility of performing tasks that ensure the economic operation of an organization are already known, the first to discuss the foundations of issues in these relations were Jensen and Meckling (1976). They proposed to manage such relationships through contracts between the owner (principal) of the organization and the professional (agent), whose function is to perform a specialized task as the owner surrogate. This act involves the delegation of authority for decision making and the freedom to exercise power by the agent.

Essentially, the Agency Theory refers to the social relations between a principal and an agent (Roth & O'Donnell, 1996). In a company, for example, the Principal and Agent hold a very professional and hierarchical relationship.  The first one is interested in keeping and increasing the value of the company’s resources and in the return on his capital invested. The later must be interested in accomplish those goals, abiding by financial compensation explicit in the hiring contract. Contractual relationships, therefore, are the determinants of the forms of behavior, limitations of authority and standards of expected performance of agents (Martinez, 1998).

There are three main dimensions to be considered in the agency (Klein, 2008), that fit also into the issue of technology transfer: (a) bureaucratic rules that define the procedures of institutional processes; (b) control standards that curb performance and (c) responsibilities (accountability) that define each ones tasks. Bureaucratic rules that define how the processes procedures work within the institution are important in the process of agency the transfer, because they streamline the procedures in the various departments, require processes to comply with internal rules and eliminate conflicts of interest between the individuals involved in the processes of transferring.

Control standards that evaluate the performance of agency are equally essential to the agency, because they determine who and at what level, someone should be held accountable for those involved in the process. This rules up everybody, from up institutional managers (in the administrative structure) to down the researchers and technical staff, who are responsible for the products under license. By appointing subjects and respective levels of responsibility, the control standards also define the expected behavior of individuals involved (Goldberg, 2008).

The concept of the theory of agency fits the purposes of this research because it allows the distinct users and generators of the research and development understand each other, although their nature and their disparate interests. For this research it does not matter the mechanism of the relationship that underpins the theory. What it does interest is its logic. In other words, for any two elements with disparate interests to work in a coherent and unidirectional way, we need a mechanism to ensure the settlement of differences. This is where the logic of the theory of agency serves the purposes of this research.  Being universities institutions with diffuse interests and dispersed objectives, as previously appointed (Rodrigues & Tontini, 2000), there are good chances that the relationships university-industry come to be confrontational rather than cooperative. Thus, the transferring of technology by agency, that is, the delegation of the responsibility for identification of users and the respective sale of the technology through the Agency, an entity external and independent of the university, can be a viable solution. In this case, the USP Innovation Agency is the Agent and the USP is the Principal.

Agency mechanisms

The process of interaction between industry, universities and research institutes in some countries, like Brazil, despite its limitations, is already a reality, according to Sbragia et al. (2006). This process has intensified in the last 30 years due, largely, to the technological revolution, that makes processes and products technologically obsoletes in an incredible pace. The traditional way of transferring knowledge and know-how to industry, based almost solely in the utilization of skilled human resources, has changed, involving directly the licensing of technology as the specific object of the relationship.


Ler foneticamente

The interaction between universities and industry, however, presents a set of challenges and conflicts that limit the technology transfer process efficiency. On the one hand, universities are not intended to profit, but to train persons who will fit the society, intends to do research and development with total freedom of choice of themes, in order to complement the teaching and the raising of the general level of knowledge. On the other hand, firms aim to generate economic profits, to ensure returns on investments to shareholders and to contribute to the dynamics of socio-economic development of the country. Equalizing the dichotomies of this relationship it is a basic condition to get synergy between the two entities and their concerns, leading to goal achievement of both.

As part of mediation and facilitation of potentially conflicting relationships between universities and industry, emerge the mechanisms for technology transfer, which may be present embedded in the Academic Departments structure, or as organizations external to the Departments, such as, the agencies of technology transfer. Agencies, or technology transfer (TT) offices articulate the process of transfer of technologies generated in the academic environment, establishing "a process that consists of several steps, including the disclosure of the invention, patenting, licensing, commercial use of technology by the licensee and the perception of royalties for the university "(Santos and Solleiro, 2006, p. 368). According to Ben-Israel (2000) it is responsibility of the TT office managing trading issues that involves the transfer of technology. It is also the TT office responsibility the technological diligence of patenting or industrial secrecy. In the case of patenting, it is necessary a preliminary analysis of the validity of the idea or discovery and its compliance with requirements of a patentable object. In the case of secrecy, a much rarer condition, it is necessary to ensure that specialists will keep the restriction to share the knowledge, to then, negotiate the contents directly into the technology transfer agreement.

TT Agencies or TT Offices mechanisms are potentially productive, but their productivity depends on factors external to their reach. In a study by Siegel, Waldman and Link (2003) with 55 people from five different U.S. universities, was observed the following critical factors as productivity determinants of TT Offices: (a) how to pay the teachers involved in the process of TT, (b) the benefits of the team involved, (c) the management practices of the team, (d) the actions taken by management to eliminate information barriers, and (e) the communication between universities and industry. Siegel et al. also study highlights the need to develop in the TT office workers, mediation skills with researchers, entrepreneurs, businesses and buyers of technology

The importance of the TT offices can be observed in the study of Shane (2002), which focuses on the differences of interaction in large technology based companies and the role of the TT offices. For the author there are four important dimensions in the process of collaboration between universities and technology-based companies: activities of contracted research, consultancy, technology development and licensing, and technology commercialization. The study reveals that technology based companies feature the following: a) more difficulty to participate in consortia, b) greater need for government funds, c) preference for the financial support, as capital investment d) the exclusive license rights, e) strong involvement of the university in following the licensing of technology, f) Additional financing for the development of the licensed technology; g) strong intellectual property protection license; and h) low royalty rates. It is considering these aspects that we can outline the policies for licensing and commercialization of university technologies. Such policies must be obeyed and mediated by the TT Office as its fundamental function.

The office of TT can operate under two perspectives of technological development: innovation driven by science or drive by market. Gereffi (1999) addresses this theme showing the intimate relationship that market demands cause or requires in the interaction of the firm with the research agents. The science driven innovation refers to the innovations resulting from research (invention or discovery) and applicable to existing products or to generate new products (Hruby, 1999). In the first case, science driven innovation could expand existing business based on their potential value to the market. In the second case, science driven innovation could produce new ventures. The function of TT offices is to raise and disseminate information on research available in the university and to maintain a portfolio of information that can be accessed by industry. The market driven innovation refers to innovations developed by the institution, based on claims arising in business. These (technological) demands guide the direction and type of innovation tailor-made to the claim (Jonash & Sommerlatte, 1999). This kind of innovation, by nature, could be developed in a shared way, between academia and industry. In this case TT organizations should either direct researchers to meet the market demands, as well as identify researchers that meet the specific needs of corporate customers.

These two perspectives are embedded in the modern concept of open innovation, which has spread widely in the XXI century, through specialists such as Chesbrough (2006). The premise of this proposition is that success of innovation in all sectors, especially industrial, stems from the use of internal resources and innovations from external cognitive bases. In this context, the potential of academic research is strengthened and the university also becomes an agent of economic development

TT organizations should ensure that knowledge of Intellectual Property will be available to industry. According to Sbragia et al. (2006), intellectual property may belong to the university, to the company or to both. The University's intellectual property includes all inventions, improvements or discoveries, whether collective or individual and all works of authorship, except scientific articles, dissertations, theses and books, created by one or more persons employed to the university. According to the authors, the software generated during the contractual relationship with the university is also considered an intellectual property. When it is made in conjunction with a company, the ownership could be shared. If any of the involved want exclusive property must plead it formally to other party. In general, the company will have property rights on results of a research when it makes significant investments in research, when it would the solely user of the resulting inventions or when it has passed proprietary information, technology or materials that have become the basis of the research. Still, the university can retain the right to intellectual property for internal research or teaching and may sub-license it to other researchers with the same or similar goals. In short, the offices of TT must maintain thorough understanding of the implications of the ownership of intellectual property for both the university and for the company. Research policies and rules for licensing and sublicensing rights must be clearly defined and communicated to both parties before the establishment of the contractual relations.

3. Methodology

The research supporting this article has a qualitative approach, supported by a case study as the research method. The case study of the USP Agency of Innovation is an appropriate method, because we are looking at the "how" and the "why" of an event or phenomenon (Yin, 2005). According to Eisenhardt (1989) is perfectly possible to indicate the presence of emerging paradigms and create new theories through case studies. For the author, the essential case study is the proper definition of the problem, the collection of systematic and reliable data, and rational analysis of information. It is noteworthy that, according to Yin (2005), through the case study method, multiple dimensions of a theory can be seen extensively in a real case. The author further explains that this research strategy is applied when attempting to characterize the object of study and when the features of it are not easily found in other samples and, moreover, when one investigates contemporary phenomena within a real context. This seems to be the study of this phenomenon, especially through the approach we are using as the premise of the study (agency the transferring of technology is an effective managerial tool to improve the technology transferring process in the context of an emerging country).

Thus, we drew up the research as an empirical and descriptive study. As a research strategy we interviewed the Director General of the USP Innovation Agency, Prof. Dr. Oswaldo Massambani. We use a semi-structured interviewing script. The interview happened within the USP Innovation Agency during the month of May 2010.

The issues addressed during the interview originated from the structure of a matrix approach of theory about the means and mechanisms for technology transfer and research objectives. The information collected in the interview were recorded and analyzed using the technique of content analysis. In addition, we used relevant information to support analysis, collected from official documents provided by the USP Innovation Agency during the interview and by the data available on the Agency’s website 

4. Data Analysis and Interpretation

USP Innovation Agency – the case

The USP Innovation Agency was established as a result of a proposal to the Rectory of USP from a working group after 16 months of investigation on the viability of such mechanism. The Agency was established on February 18, 2005, through the Resolution No. 5175 USP, for the purpose of managing and disposing of the innovations produced by the University of São Paulo – USP to the society. The Agency works to protect intellectual property generated through research work carried out by faculty, students and staff of the university. Among its tasks we highlight the university's management of relations with the business world. The Agency’s scope of work includes the development of activities involving: business incubators, technology parks and specific training. Specific objectives embraces: to promote entrepreneurship by supporting technical, managerial, and additional training to entrepreneurs and alumni. Additionally, the institutions incorporated by its segment of relations can be supported by the SEBRAE (Brazilian Service to Support Micro and Small Enterprises), a para-governmental institution supporting the development of entrepreneurs and the launching of new companies, with which the Agency holds a cooperation agreement.

The USP Innovation Agency's mission is to "Promote the use of scientific, technological and cultural knowledge produced within the University of Sao Paulo targeting to support the socio-economic development of São Paulo and of the country."  In this regard, the main goals of the Agency are "to identify, support, promote, encourage and implement partnerships with the business, governmental and nongovernmental organizations aiming at the development of the society." (Agency, 2010). The Innovation Law No. 10973 of 2 December, 2004 constitutes an important component in the process of creating the USP Innovation Agency, which provided a favorable environment for technology transfer because of tax incentives and indulgences allowed by this law.

The Agency location and operation

Each campus of the University of Sao Paulo - USP has an office USP Innovation Agency that work cooperatively with each other. Each office, however, focuses on the vocation and potentialities of the respective campus. There are seven offices altogether, located in the following cities: Bauru, Lorena, Piracicaba, Pirassununga, Ribeirao Preto, Sao Carlos and Sao Paulo.

Operationally, the Agency USP performs two macro functions: (a) the diligence of technology offer, and (b) the diligence of technological demand and opportunities. The diligence of technology offer involves the construction and maintenance of database research, experts, patents and trademarks, and copyrights. This function also incorporates the assessment of patentability of ideas and the process of filing patents and copyrights. The diligence of technology offer incorporates the function of science driven innovation, whose concept is to provide businesses with research results that prove to be applicable and promising enough to generate a deal based on the inventions.

The technological demands diligence involves the construction and maintenance of database opportunities (market intelligence) technologies in direct demand and technology areas of interest to the market. The diligence of technological demand incorporates the concept of market driven innovation, which sets partnerships between academia and industry, aiming to meet the technological demands of enterprises through innovative products and processes. The technological diligences, both the offer and the demand require the USP Innovation Agency to maintain a competitive technological intelligence system very accurate and active. On the one hand, the technological intelligence of offer can be enhanced by identifying important technology trends. On the other hand, the demand technological intelligence, bringing market opportunities for innovations and technological needs, can influence the direction of the research among research groups.

Agencing the technology transferring

The availability of innovations originated within the USP, is only possible if Intellectual Property would be ensured (whether by industrial, scientific, literary and / or artistic character) to the creators responsible for the production and if there is reward for the creation, at least, for a certain period of time. It is important to notice that the insurance of Intellectual Property extends to copyright materials deposited, such as computer programs and Internet domains. Thus, Dr. Massambani emphasizes the importance of holding the patent filing, which ultimately, helps close sales as licensed technologies. The university assumes ownership of the patents of researchers and inventors attached to her.

Generally, the agency negotiates licensing in two forms: exclusive licensing and non-exclusive licensing. In the first case, the company holding the license is the only one to exploit the patent or part of it. In the second case, there may be more than one company licensed to explore the patent or part of it.

The technology premium protocol follows a general orientation, negotiable, usually involving a down payment (initial payment fixed in a single plot) and royalties (percentage of net sales, gross income before taxes, all part of the sale of each product that incorporates the technology protected by the patent). The revenue obtained in this process is apportioned as follows: to Researcher 50%; to the Department of the Researcher 40.5%; to Unit of the Researcher 4.5%; and to the Rectory 5%.

Financial results obtained by the USP Innovation Agency are not incorporated into its budget, because the agency is funded by grants from local government. In 2009 the agency's budget was R$ 5 million, from which R $ 2 million were allocated to operating expenses and R$ 3 million would cover payroll. Currently the agency has about 80 employees, including contractors, fellows and interns

The uptake of technologies and research results from USP academic community involves direct contact with teachers and researchers and open internal events, such as Connecta - aimed at managers of R & D & I, entrepreneurs and capital venturers. Another event is the Olympics of Innovation, where the authors can expose their ideas and their unpublished works to be considered for deposit. Dr. Massambani thinks that the uptaking of the Agency is increasing. To prove it, he points out that the Agency, in about five years, holds 100 patent deposits per year, that means, one deposit application for each group of 56 teachers. It is a data that indicates a certain distance from data of major research universities in the USA, but it demonstrates activity and growth. The goal of the Agency is to deposit 500 patents annually from 2012 on.

The Technology Transfer at the University can also be accomplished through contracts of know-how transfer, exploitation of trademarks and copyrights, among others. They follow, in general, the same rules for patent licensing. It is worth noting that the costs arising from the patenting and licensing are the responsibility of the company that will benefit from the innovation. Figure 1 shows the performance of the licensing intermediated by the USP Innovation Agency accumulated up to 2007 and the results for 2008.

Figure 1 – Number of Licensing intermediated by the Agency
Source: USP Innovation Agency (2010a)

Figure 2 shows revenues from royalties of patents and other rights intermediated by the USP Innovation Agency. Note the trend on transferring non-exclusive technologies from 2008 on.

Figure 2 – Royalties Revenue (R$)

Source: USP Innovation Agency (2010a)

Supporting new business is also part of the Agency’s mission, which encourages the emergence of spin-out companies, that is, companies that spring out as a direct result of researches at USP. The Agency encourages, through allocation of seed money, start-ups by researchers, but especially by alumni. The seed capital, comes still from government agencies or private banks that support the establishment of new businesses. The new companies can be established in a self-sufficient way as well as they can be set up in one of the incubators of the USP campi (CIETEC in São Paulo, SUPERA in Ribeirão Preto; ParqTec in San Carlos; ESALQTec in Piracicaba, and Unitec in Pirassununga. The Operational process of the Agency is depicted in Figure 3 which summarizes the flow of activities that supports the processes of technology transfer from USP do industry.

Figure 3. - The Flow of Technology Transferring intermediated by the USP Innovation Agency
Source: Adapted from USP Innovation Agency (2010a).

Briefly, the Agency conducts science-driven innovation by providing research results that arouse the interest of companies as to generate business based on the inventions. Likewise, the Agency brings the interests of innovation and new technologies from market into USP (market driven innovation). It then mediates the establishment of partnerships between academia and industry, aiming to respond to specific technological demands.

The results of technology and innovations transferring to date have shown to be modest, due mostly to the short life of the Agency. Up to 2007, the Agency raised R$ 600.000 altogether, and in 2008, it raised R$ 100.000. These values refer to Royalties received by the Agency, representing 2% to 5% of the revenues obtained by the licensed technology. Dr. Massambani reports an increasing number of contracts with companies, among them the major national companies such as Embraer, Petrobras, Vale S/A, and large foreign companies like HP and Oxiteno. Currently, the Agency partners with 30 companies, which are using technologies developed within USP. The Agency also holds in its technology database more than 700 ready to use technologies waiting to be acquired.

Despite of the low number of licensing, as shown in Figure 1, there is a significant increase in the number of patents of technologies from the USP. Figure 4 shows changes in the number of deposited patents and applied for.

Figure 4 – Number of Patents Deposited and Applied
Source: USP Innovation Agency (2010)

Licensing and entrepreneuring

One of the most important fundaments to successfully negotiate and license technologies is the identification of the market value of a technology. Subjective evaluations by either party are always conflicting, says Dr. Massambani. Thus, the Agency uses a standard tool of analysis and valuation of technology, the software called: Technology Research Program (ITP). This software was developed in partnership with the University of Campinas (UNICAMP). It assists in the analysis of both the innovative and commercial potential of technologies. After determining the market value of the technology, the negotiation reduces to the choice of exclusive or non exclusive technology use contract.

The process of market driven innovation has different formats to reach the mass of researchers and experts at USP. There are three channels used by Agency to interact with market: (a) the technical answer, (b) SEBRAE, and (c) Portal i3. The technical answer channel is a service geared to the demands of low complexity of entrepreneurs and micro and small business throughout Brazil. Through a website, (, it is possible to assess a database with technical information to solve a specific technological problem. In the absence of response to the problem the user can refer the question to the Agency e-mail, which will route it to be examined by experts who will give the appropriate response.

A second channel of interaction by demand with the Agency is done through SEBRAE. This is a service aimed at entrepreneurs and small businesses. The Agency receives the technological demands of entrepreneurs through Sebraetec, a service of Technology Consultancy of SEBRAE and forwards the demand to specialists or teams of researchers who work in the area of the requested technology to fulfill the quest. These interactions are strong indicators of technological trends or technological insights that eventually mark the planning of the direction of groups of applied research within USP.

The Portal i ³ - Imagine, Innovate and Impact – is designed to meet the demands of medium and large enterprises. Through this portal users can identify the USP most suitable researchers to solve the technological problem in demand. The company shall submit, under seal, the description of their technological demands. The USP Agency analyzes and classifies the demand, identifies the researchers and laboratories at USP with the potential to solve the demand and promotes the meeting between the technical teams to discuss and plan further actions. As a result, both institutions may establish cooperative agreements, according to their convenience. This portal is one of the most efficient instruments to promote the Open Innovation.

The process of science driven innovation finds different ways to dispose innovations produced in the University. One way is a program to stimulate the establishment of new companies (Entrepreneurship Mentoring).  In this program new ideas are evaluated, especially from USP alumni, to directly establish new companies. In these cases, if necessary, that the Agency supports the quest and appropriation of seed money for the start-up. Another way of stimulating science driven innovation is the Managers of Innovation Training Program, working in a company. Through this program the Agency (a) enables industry professionals to carry out innovation projects, (b) identify partners for the development of innovative projects, and (c) enables companies to submit technical proposals.  As in this program there is involvement of many entrepreneurs from the companies, the Agency also becomes a stimulating agent of corporate entrepreneurship. This process contributes to the formation of innovation managers in enterprises that will strengthen the ties with the Agency and with the existing scientific teams at USP.

According to Dr. Massambani, the most important aspect for the Agency is what it can do for the society at large and not the financial returns to USP. Important are the generation of jobs, the benefits to local communities, the generation of revenue for companies, that in return bring more taxes revenues to the country. In this process the Agency already helped to created 20 companies originated from science originated at USP.

Interpreting the Agency Role

The role of agencing technologies conducted by the USP Agency can be identified at least under five core functions of intermediation. The first function refers to the approximation of the university with industry. Normally, researchers do not want or have time to look for industries interested in their work. Because they are not market experts, they end up finding and negotiating with companies whose contracts may not really beneficial to both parties. Researchers like more to focus on their research and do not want the additional burden of questing and negotiating with potentially interested companies. Thus, the Agency by undertaking this work, frees up researchers for them to concern with their business, identifies the best options of companies to absorb technology and gives full support to the negotiations in order to favor both the company and the university.

The second function of agency is based on the streamlining of bureaucratic procedures of licensing. The Agency actually becomes a specialized dispatcher in procedures of the institutional processes. First, the procedural rules governing the procedures in the USP must be observed. Second, the processes must have the legal normative rigor that any process of such nature requires. This mediation is done in a professional, standardized and quick form, allowing the effective implementation of contracts.

A third function of the Agency refers to expedite the diligence of demand. Companies or independent entrepreneurs with technological demands give up the demand or waste time and create enormous stress, for failing to identify the right expert or the right research group. Since the Agency, already has a database of researchers and research groups, it can quickly identify experts who can best help address the demand.

A fourth function of the Agency goes in the opposite direction, that is, in the direction of streamlining the market diligence. Researchers, with ideas, innovations or ready technologies, in general, have difficulty in finding interested companies in a better position to incorporate their ideas or technologies. The Agency, by contrast, identifies rapidly and more broadly, through its database and network of relationships, the companies potentially interested in the technology available for licensing. In general, the selection of the Agency is an effective option because it considers the compatibility between the technology and the technological digital of the company, increasing the chances close down the deal.

Finally, a fifth function of the Agency is to exert a protective barrier against the misuse of research results by individuals or companies in the market. Companies coming into direct contact with researchers and that have experience in the field of the technology, may end up stealing the researchers’ ideas, incorporating them into their processes and not paying for them. The Agency acts as a restrictive mean to cover the technology key aspects and prevent companies from seeing the underneath ideas before negotiating the value that they should pay to assess the technology.

USP, as a traditional institution of higher education, has departmental internalist structure. The departments, as primary cell of intellectual production and transmission of knowledge, determine the priorities and the dynamics of their professors, always focusing on teaching activities. The research activities result from pressures originated in the performance evaluation system, reward system and career ladder at USP. The research, however, is evaluated in terms of their intellectual publication, be it as research results or technologies. Research results may perfectly be deposited as a patent or they can be published as an article. Therefore, despite of the internalist structure, the University progresses with research production. What is neglected in this structure and processes is exactly the transfer of knowledge and ideas to society as a fundament of a technology or as a technology itself. This requires more efficient mechanisms than the channels of extension existing in the academic departments.

The delegation of technology transfer activities, therefore, is a naturally efficient way to transfer technology, ideas and innovations to market, in this context. In this case, the intermediation of the transfer, with rules and standards of performance well defined in advance, is compatible with the logic of the agency theory. The social relations that govern the actions of the Agency with the community of USP (Roth & O'Donnell, 1996) shape the social role of intermediation of the Agency. However, the institutional rules governing the functions (science driven and market driven innovation), the procedural requirements to which the Agency must stick to are determinants factors that influence behaviors, limitations of authority and performance standards expected from the Agency by USP (Martinez, 1998). The five functions described above, attest the importance of the role of intermediation of the Agency in the process of technology and innovation transfer to industry and in the carving of new entrepreneurs.

5. Final Remarks and Conclusions

Despite of the truth embedded in the axioms of Klein (2008) - there is no complete agreement - and Jensen and Meckling (1976) - there is no perfect agent - the role of intermediation of the USP Innovation Agency, in the process of technology transfer from university to the industry is relevant. The intermediation of the Agency supports the premise that the agency's technology transfer is an effective way of accelerating technological dominion of companies, especially in emerging countries.

Internally, it is undeniable the relevance of the USP Innovation Agency in the process of awareness, support and encouragement of applied research, culminating in patents, since the country, which is a developing one, needs urgently a broader and more sophisticated technology base. Given the departmental structure and management profile internalist in character, despite of its enormous potential to generate technology, USP needs more efficient mechanisms to transfer technology to market.

The agency of the activities of technology transfer in the format used by the USP Agency of Innovation guarantees not only speed, accuracy and reliability of the transferring for the parties involved, but also stimulates the generation and creation of new businesses based on technologies developed internally in the university. Structurally, the Agency does not bind to the University’s departments, has an independent budget and is managed by specialists. Strategically, the Agency maintains its focus on critical processes of transfer, spends special attention to its strategic alignment to administrative and academic processes and norms.  These two structural and strategic conditions are the warranty that the Agency operating under an externalist concept, turns out to be a more effective tool to transfer technology to industry. The operation as an external organization allows for a specialized intermediation, where expedite processes, quality of services and accuracy of information curb the performance of the Agency as the agent, accountable for the efficiency of the technology transferring system of USP. As the principal, USP established a set of rules and regulations through with she can control the effectiveness of the transfer and can evaluate the congruency of interests.

Additionally, the Agency’s programs of stimuli and training of entrepreneurs, develop one of the most relevant tool to improve the innovative capacity of businesses: the corporate entrepreneurs. These processes bring double result for the model agency. On the one hand, the agency speeds the formation of a technology domain more quickly into the country, either by direct transfer of technology, either by forming new companies.  Also the formation of corporate entrepreneurs supported by the Agency helps develop and incorporate innovations strategically relevant to the companies. On the other hand, the intermediation helps broaden and consolidate a socio-economic system more balanced in the country and more competitive internationally. Such evidence is difficult to be impeached as a development model, especially for emerging countries like Brazil, whose source of technological knowledge lies in a greater portion, within the universities.

Despite of significant achievements already made by the USP Innovation Agency, its history is still short. Science and market driven innovation programs present their first results, which although promising, should remain under observation for possible improvements and increased efficiencies. It is suggested, therefore, further studies related to the level of efficiency of mechanisms used for technology transfer and the level of influence of market demands on the direction of internal research and development.

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1 University Nove de Julho – UNINOVE, Brazil –
2 University Nove de Julho – UNINOVE, Brazil -
3 University Nove de Julho – UNINOVE, Brazil -
4 University Nove de Julho – UNINOVE, Brazil -

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