Higher education

University of Iowa to state: 'Streamline the innovation pipeline'

Change laws, provide early-risk capital, encourage private partnerships

Bruce Harreld

UI president
Bruce Harreld UI president

IOWA CITY — As internationally esteemed research institutions, University of Iowa and Iowa State University pride themselves on investigating, discovering and innovating at a quickening clip — springboarding new technologies, medical advancements, industrial improvements and economic entrepreneurship.

But UI President Bruce Harreld and some administrative colleagues want to go further — possibly seeking legislative help to tear down barriers in state law limiting engagement with the private sector.

“These limitations include a lack of clear protection for proprietary confidential information shared by the private sector, which limits opportunities for collaboration,” Harreld said in an emailed statement to The Gazette. “In the next legislative session, we hope to seek legislation that would add these protections as well as streamline the innovation pipeline in the state.”

That push comes as all three public universities in Iowa absorb large cuts in state support and consider significant increases in tuition rates.

The universities also are hoping to bolster resources by increasing philanthropy, reorganizing campus units, improving efficiency and potentially capitalizing on economic opportunities involving the private sector.

“Allowing the UI, through its faculty, staff and students, more freedom to pursue new ideas, collaboration and economic opportunities will allow the UI to potentially grow new resources in research and investment from the private sector,” Harreld said his statement.

Doing so, he said, “would have the added benefit of creating new jobs and businesses across the state.”



Harreld didn’t elaborate on potential legislative changes he’d like to see. But Daniel Reed, UI vice president for research and economic development, noted several state and legislative actions that could “provide more stimulation to this environment.”

First, he said, is the understanding any private entity that signs a nondisclosure agreement with the university might not be able to protect its confidential, proprietary information under current state law.

“It’s something that we always caution companies about and say, ‘We will do our best to protect corporate information, but do be aware of this possibility,’ ” Reed said.

Although Reed hasn’t personally experienced cases where information sharing and privacy concerns obstructed a potential UI collaboration, “it’s certainly an impediment,” he said. “There’s no doubt about that. It may have a more indirect conservative effect than a direct chilling effect.”

Increasing protections for private partners could open new opportunities, according to Reed, who stressed the idea is not to decrease transparency.

“It’s not about hiding anything from the public,” he said. “It’s that if one wants partners, they legitimately expect to be able to protect things they consider private.”


The state also could help universities escalate innovation, collaboration and thus economic development by encouraging more early stage risk capital and investment, Reed said.

Much of the intellectual property, devices and drugs emerging from the UI and ISU relate to biomedicine, pharmaceuticals, bio-agriculture and engineering — often federally regulated areas with trial and approval mandates that keep products from hitting the market for years, even decades.


“When the time to payoff could be measured in a decade, that takes some patience because your capital can be illiquid for many, many years,” Reed said. “So increasing that pool of risk capital in the state is probably one of the single biggest things that would accelerate companies in Iowa and keep them in the state.”

Reed said the university has been working with the state on strategies to encourage more early stage investment, which could include changing tax policy or creating new incentives.

“What are the legal, what are the tax incentives that would encourage angel investors and seed funds to invest Iowa dollars in Iowa companies,” he said. “What we don’t want to have happen is that there’s not investment available in the state, investors cherry pick the ideas, move the companies out of state and then we’ve lost the state benefit.”


Improvement in this area could go a long way, as Reed said Iowa’s research universities hold immense untapped potential.

“There’s a lot of opportunity to create wealth and value in the state if we could address this early-stage risk capital hurdle,” he said.

But, Reed said, when it comes to added revenue for the university, don’t expect immediate results from any legislative or statewide changes. Even with more help on the front end, “these are long-term bets.”

Most pharmaceutical candidates fail, for example, although Reed noted some exceptions “pay off at very high levels.” Still, over time, the benefits could be big.

“It’s a long-term strategy,” he said. “It’s not one that would likely yield substantial revenue in a one or two-year time frame. It’s a one- or two-decades kind of time frame for a bet.”



Even without legislative changes or state support, Reed said, the university has been creating more space for innovation and product development — like Protostudios, a state-of-the-art, rapid-prototyping facility located at Merge, an Iowa City co-working space and innovation hub.

Protostudios encourages and supports inventors in developing “fully functional” prototypes of their product, allowing them to test, redesign, determine manufacturing paths, and demonstrate usability to investors.

A new UI-based Translational Research Incubator, likewise, boasts a unique space aimed at providing “an environment for early, research-based companies to accomplish critical milestones toward commercialization.”

“The reason for being on campus with the medical labs,” Reed said, “is to allow entrepreneurs to quite literally run back and forth between their research lab and their startup company.”

The university annually reports economic development activity, including intellectual property disclosures, patent applications filed and issued, and royalties and license fee income.

In the 2016 budget year, the UI filed nearly 300 total patent applications — the most since at least 2004 and double the 148 in 2015. That increase, according to UI officials, is the result of faculty being encouraged to disclose more intellectual property.

l Comments: (319) 339-3158; vanessa.miller@thegazette.com

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