Nigerian government is looking for how to diversify its economy. That is expected as the future of the world economy and specifically the automobile sector will not likely be powered by hydrocarbons but by electrons.That transitioning process is already happening with Nigeria’s junior minister of Petroleum Resources looking for petroleum demand within Africa.
Nigeria is a nation with talented people. With the right policy, our moment of glory will arrive. We have seen many countries fully recovered from the most devastating global recession since the Second World War, and their policymakers, business communities, academia, and governments pursuing ways to accelerate growth and competitiveness. Nigeria, unfortunately, is yet to recover. Our stock market is still embarrassingly under-performing.
I do believe that government has a major role in shaping commerce and industry. Yes, governments do matter and a single legislation could have impacts that can redesign a nation’s economic destiny. Globalization makes it so important that nations must compete not just on technologies, but on policies upon which those technologies are developed and commercialized.
This makes it possible that two universities or research institutions in two separate nations can develop similar technologies with one creating Fortune 500 companies within a decade and another having the idea locked up in a cabinet. In other words, the policies or legislation made by congress or parliament on what happens to inventions supported by government funds matter.
The Bayh Dole Act – America’s Most Important Economic Legislation
In 1980, a United States legislation dealing with intellectual property emanating from federal government-funded research was enacted. The legislation called Bayh-Dole Act (after two Senators Birch Bayh of Indiana and Bob Dole of Kansas that sponsored it) or University and Small Business Patent Procedures Act gave US universities, small businesses and non-profits intellectual property rights and control of their inventions, even though they were funded by government.
Through this Act, universities, small businesses or non-profit organizations could pursue ownership of inventions in preference to the government.
What this means is that instead of sending the patents or inventions to the government agencies like National Science Foundation (NSF) or National Institute of Health for them to file away in their office cabinets, this Act empowers the inventing entity to pursue commercialization of the idea. Simply, the U.S government elects to fund an idea and allows the fund recipient to profit from any invention that comes from that idea.
This Act provides clarity on many issues that could derail the process of taking ideas to market, especially when those ideas were funded by US federal government. For professors, it provides incentives to pursue research both for discovery and for profit since they also could profit from their inventions. Just as their students could discover and commercialize, the university dons can also do the same.
It has been a new era as the number of Technology Transfer offices in the US universities has increased many folds. As schools file more patents, they continually look for opportunities for venture funds to commercialize or simply license their patents to other institutions. These days, schools quote the number of start-ups they have incubated as a metric to their competitiveness. They will tell you the stories of their students who graduated and founded firms and use that as selling points in their brochures. This is business right in the four walls of the universities.
Interesting, schools do not just teach business regulation and competitiveness anymore, they experience them because they are getting products to the market, though indirectly. There are many start-ups which have become pipelines for the big MNCS (multinational companies) to acquire. Before the Act, some of the ideas that enabled the start-ups might have been overlooked by MNCs. But as the former show promise and profitability, they could be bought over and that mission of making society better is given a bigger scale.
The Act’s Impact – Google Effect
For me, Bayh-Dole Act is the most important business legislation of the last century in the United States. And this is American Congress at its very best moment. It delivered through legislation and transformed the pace of innovation by providing a fluidic system that enhances U.S competitiveness.
The outcome of the Act has spread around the world because of the number of technologies which have been commercialized and subsequently penetrated across the globe. The discovery of the search engine that powers Google was done in Stanford University. When Mr. Page and Mr. Brin decided to pursue commercialization of this algorithm and created Google, they must have been grateful for the federal funds that partly funded their discovery. It is possible if not for this Act, we may not have Google today.
The African Case
It is evident that many African universities now have Technology Transfer offices or what they call Consults. Good idea, but I must say that the structure where those offices operate is entirely different from what Bayh-Dole Act gave the American schools. The Act is helping American taxpayers to reap the benefits of funding the academic institutions through innovative products in the market. In Africa, you rarely see government in the mix of research and the whole constructs of technology transfer office seems superfluous since no research takes place.
It is one of those things that happen when African professors visit American universities for two weeks and afterwards go home trying to recreate the American educational system. Unfortunately, the root cause analysis is not thought through to appreciate the fundamental evolution of what goes in the US system. Yes, you have technology transfer offices, but the school has no electricity to run a lab.
Case Study: South Africa
In 2010, the Intellectual Property Rights from Publicly Financed Research and Development Act enacted by the government of South Africa, went into effect. The Act regulates how private institutions access university research when public funding is also involved. It strives to eliminate perceived exploitation of public funded university research by making sure that taxpayers are adequately compensated. The implication is that companies must not just fund research, but also ensure that no public funding is used, if they intend to become sole beneficiaries.
The proponents of this legislation have argued that they are helping the citizens by safeguarding the public funds. And across the continent, other countries followed South Africa and enact similar legislation to forestall profit-seeking institutions from ‘exploiting’ taxpayers. The Act is a welcome development in a continent where IPR remains weak and developing the structure will surely help in the long-term competitiveness of Africa. The nation has the right to seek for companies to properly license or pay for research.
Yet, the challenge in Africa is not necessarily university licensing of technology, but actually developing an environment that can sustain quality research. In this case, following South Africa that has the best university research network in Africa to enact a similar Act will be a misplaced priority for the other nations. Any sign that involvement of public funds in universities that are predominantly owned by the public will limit access to research outcomes could alienate the few companies that support the schools. The relationship between the university network and the industry is weak and increasingly schools still destroy research outcomes, simply to make space to store new ones. Products nurtured in the university labs are not common. So any more legislation that can scare companies could dampen any prospect to enliven the academic-industry partnership in the continent.
Why Nigeria Needs Our Bayh Dole Act
US universities are very competitive, and they respond better to the needs of the society. They also work hard on managing their IPs. While some could argue over the benefit of that since universities should traditionally share freely, the pursuit of commercialization and the rewards that come with it help to make research relevant to the needs of the society. And this new focus has created a platform where collaboration with industry has reached an all-time level.
Possibly, without this legislation, the idea that powers Google might still be filed out somewhere in the NSF cabinet. And the world will miss the dynamism, positive disruption, jobs, success-domino and information access that arrival of Google gave the world. When they introduced 1GB gmail, Yahoo was forced to upgrade its users from 4MB to 1GB and later, limitless storage.
It is not just Google, there are many small companies in pharmaceutical, semiconductor, and IT industries which exist today because the Act made it so easy that individuals and entities can hold rights in preference to government and in the process increase the chance of getting innovative products to the market.
The lesson here is that congress and parliament can change the future of any nation when good policies are made. This is where I want Nigeria to pay attention. Our FIIRO and Electronics Design Institute (ELDI) Awka along with our universities can open up with a very smart legislation.
I understand that this Act might have reduced the free flow of information and ideas across the academia because everyone wants to guard its ideas for profit; but we have to live with the reality that there is nothing that does not have a potential drawback. But at the end, it provides a perspective that makes education relevant and useful.
Also, early patenting of ideas or processes without pursuing immediate commercialization could decelerate the pace of their improvements from other partners. In other words, when schools patent their ideas, they could possibly be closing the channel of progressive advancement on those ideas. From professors to graduate students, few will be interested to work on ideas which have been patented.
But the reality is that over the last five hundred years, intellectual property rights (IPR) have proven to be the difference between the old world and the new one and this Act cannot be an exception. A world of IPR is a world of innovation and though Bayh-Dole can have some drawbacks, it is to me the greatest business legislation in the last hundred years.
I challenge the Nigerian National Assembly to begin work to liberate our research institutions so that along with our schools creators and inventors can profit from any federal funded research. We want them to be greedy as that will help stimulate innovation in Nigeria. Nigeria needs our Bayh-Dole Act.