The Davis Dilemma: New Energy for Innovation, But Where to Grow?

5/15/14Follow @wroush

The Sacramento-Davis Corridor: Seeding an Innovation Cluster

Xconomy presents a two-part series on efforts to transform the Sacramento region into a major new innovation cluster. Part 1, published on May 14, looked at changes in Sacramento that could make the city more hospitable for technology entrepreneurs. Part 2, today, focuses on nearby Davis—home to the University of California's leading agricultural campus—and its role as an innovation engine for the region.

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a good place to get around on a bike; in fact, in 2010 the city became home to the U.S. Bicycling Hall of Fame.

UC Davis, whose campus is technically outside the city limits, is most famous for its programs in agricultural and environmental sciences and veterinary medicine. But it’s also a leader in areas like renewable energy, manufacturing technologies, and business management. It has been rising up the ranks of the nation’s leading universities in terms of outside research funding; it collected $681 million in 2009-10 and $754 million in 2012-13, an amount that put it in the top 20 U.S. research universities.

But for a long time, the lavish R&D spending at UC Davis wasn’t translating into much new business creation, either in Davis or in the larger Sacramento region. The reasons for this disconnect are complex. For one thing, the UC Davis Office of Research, which handles the process, was historically understaffed, according to Dushyant Pathak, who joined the university as associate vice chancellor for technology management and corporate relations in 2012. Outside critics have also said the office imposed too many layers of bureaucracy. Deals to license university-owned technologies to outside companies could take months or years to negotiate, even when the companies were led by UC Davis faculty members.

Mrak Hall is home to the UC Davis administration, including Chancellor Linda Katehi and the newly beefed up Office of Research.

Mrak Hall is home to the UC Davis administration, including Chancellor Linda Katehi and the newly beefed-up Office of Research.

Things started to change in 2009, when Linda Katehi, an electrical engineer and circuit designer by training, was named as UC Davis’s sixth chancellor (and its first female chief). Katehi—it’s pronounced kah-TAY-hee—holds 19 patents, and among her earliest actions were creating a blue ribbon committee to review tech transfer and commercialization at the university and setting up a privately funded Engineering Translational Technology Center within the School of Engineering. The center has spun off at least two startups, a network management company and an audiophile headphone maker. “We envision a much larger role for the university as an enterprise for innovation and an economic driver,” Katehi told the university’s board of regents in 2011.

While Katehi has been a successful rainmaker, bringing hundreds of millions of dollars in new research funding to campus, she has been equally busy overhauling the way the university shares the resulting intellectual property and connects faculty and students with entrepreneurs and investors.

“She came in with the right kind of background and a complete understanding and appreciation for what we need to do,” David McGee, the executive director of UC Davis’s Innovation Access office, told me when I visited Mrak Hall, a white brick-and-concrete edifice that serves as the university’s administrative hub. (Innovation Access is UC Davis’s label for technology licensing.) “When you have a top-down driver, it sets a tone that is infectious throughout the campus.”

Dramatis Personae
A few of the Davis- and Sacramento-area business and university officials and entrepreneurs mentioned in this story
Bob Adams Director, UC Davis Sustainable AgTech Innovation Center
Meg Arnold CEO, Sacramento Area Regional Technology Alliance (SARTA)
Jack Crawford General Partner, Velocity Venture Capital
Cleve Justis Executive Director, Child Family Institute for Innovation and Entrepreneurship
Oleg Kaganovich Co-founder, Black Emerald Capital Partners, Chair, SARTA AgStart
Linda Katehi Chancellor, UC Davis
Bret Kugelmass Founder, Airphrame
Denise Manker Director Global Agronomic Development, Biologics, Bayer CropScience
David McGee Executive Director, Innovation Access, UC Davis
David Morris Managing Director, TechDavis
Dushyant Pathak Associate Vice Chancellor for Technology Management and Corporate Relations, UC Davis
Graham Ryland CEO, Barobo
Peter Van Deventer Co-founder, SynapsSense, Board Chair, SARTA
Rob White Chief Innovation Officer, City of Davis

Katehi directed new resources to the Office of Research and brought in Harris Lewin, a genomics expert from the University of Illinois, to run it as vice chancellor. Lewin hired several associate vice chancellors, including Pathak, who was formerly an entrepreneur-in-residence at QB3, a UCSF-based operation known for its startup incubator programs.

With its expanded staff, the office has come up with an array of cleverly named programs intended to boost spinoff activity. There’s STAIR, for Science Translation And Innovative Research, which will provide proof-of-concept grants of $25,000 to $50,000 to help faculty show that their ideas have commercial feasibility; DRIVE, the Distributed Research, Incubation, and Venture Engine, a project to create a collection of business incubation spaces around campus; the Office of Corporate Relations, which Pathak calls “a concierge service for companies seeking to engage with the research enterprise on campus”; and Venture Catalyst, which is intended to train UC Davis researchers to think and act more like entrepreneurs (it’s partly modeled on QB3’s “startup in a box” program). The Office of Research also created a way for McGee’s Innovation Access office to waive the up-front patent filing fees, often $15,000 or more, that would-be entrepreneurs must pay if they hope to spin out a company around technology developed at the university.

All of these programs are new (though not unique among universities), and it’s too early to say what kind of long-term impact they might have. But the university is already spinning off new companies at an increased rate: 11 companies using UC Davis technology have been launched in this fiscal year, says McGee.

“We are a land grant university and our mission is about education, research, and bringing about public benefit in as many ways as we can leverage—not just paying lip service, but putting our money where our mouth is,” Pathak says. “All the folks in our office believe that. They just haven’t had the resources to act on that belief,” he says, until Katehi’s appointment.

Putting Down Roots in Davis

One important stop for anyone at UC Davis who has an idea for a commercial product is the Graduate School of Management’s Child Family Institute for Innovation and Entrepreneurship. Despite its name, the Institute has nothing to do with children or families: it was established in 2011 with a $5 million gift from Mike and Renee Child, residents of Atherton, CA, who were both members of the UC Davis Class of 1976. (Mike Child trained as an electrical engineer, but made his fortune as a managing director at the private equity firm TA Associates.)

With the endowment, the management school was able to formalize and expand earlier startup incubation efforts led by Andy Hargadon, who is now the institute’s faculty director. Hargadon had found that “there was so much great innovation happening on campus that wasn’t really getting a great outlet,” says Justis, the executive director. The organization’s mission is to work with entrepreneurially minded faculty, staff, and students and help them decide whether their business ideas are viable. Says Justis, “We bring in VCs, lawyers, businesspeople, mentors, and a support system, and help them evaluate their idea and figure out if it can be commercialized; if so, how; and if not now, when.”

That’s standard stuff at big universities trying to boost their business profiles. But Davis was late to the game, and what’s noteworthy is that at a school with twice the enrollment of Stanford, nothing like the Child Family Institute existed until three years ago. The institute runs a popular business plan competition called Big Bang, but its longest-running program is the Entrepreneurship Academy series: three- to five-day “mini-MBAs” with 40 to 50 participants each. The academies are held three times a year and usually focus on a single sector such as biomedical innovation or cleantech. All told, more than 1,000 people have participated, Justis says.

Teams participating in the academies have gone on to start more than 50 companies. One is a Davis-based robotics startup called Barobo. Co-founder and CEO Graham Ryland had devoted his master’s thesis work at UC Davis’s Integration Engineering Laboratory to building a modular robot called Linkbot for STEM education. It’s a versatile, cube-shaped device that can connect with other modules to form larger, more complex robots.

Barobo's Linkbot modular robots are used in classrooms to teach concepts in mathematics and programming. The 12-employee company, based in downtown Davis, was the first to graduate from local startup accelerator Davis Roots. Photo: Palvinder Jagait.

Barobo’s Linkbot modular robots are used in classrooms to teach concepts in mathematics and programming. The 12-employee company, based in downtown Davis, was the first to graduate from local startup accelerator Davis Roots. Photo: Palvinder Jagait.

“I’ve wanted to work with robots and start my own robot company since I was eight years old,” Ryland says. But running a startup can be a hazardous ordeal as much as a fun adventure. The entrepreneurship academy was “a kind of bootcamp for understanding all that went into starting a company,” Ryland says. “It really took a lot of the haze or lack of definition out of the process.”

Barobo has ended up as a kind of poster child for startup innovation in Davis. Its next important stop after the Entrepreneurship Academy was Davis Roots, a non-profit startup accelerator co-founded by Hargadon and Anthony Costello, a serial biomedical entrepreneur. Companies selected for the Davis Roots program get office space in … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • mffitzgerald

    I had no idea that MIT and Harvard were not in the top 20 universities in terms of outside research dollars pulled in.