English translation provided for reference. Original images are retained in their source language.
Transformation of scientific and technological achievements It refers to the process of transforming scientific and technological achievements with practical value produced by scientific research and technological development from laboratory form into commodity form, and finally realizing their economic and social value. Article 16 of the "Law of the People's Republic of China on Promoting the Transformation of Scientific and Technological Achievements" (passed at the 19th meeting of the Standing Committee of the Eighth National People's Congress on May 15, 1996, and amended in accordance with the "Decision on Amending the Law of the People's Republic of China on Promoting the Transformation of Scientific and Technological Achievements" at the 16th meeting of the Standing Committee of the 12th National People's Congress on August 29, 2015) stipulates six ways of transformation of scientific and technological achievements.
Holders of scientific and technological achievements can use the following methods to transform scientific and technological achievements: first, invest on their own to implement the transformation; second, transfer the scientific and technological achievements to others; third, license others to use the scientific and technological achievements; fourth, use the scientific and technological achievements as a condition for cooperation and jointly implement transformation with others; fifth, use the scientific and technological achievements as a price for investment, converting shares or capital contribution proportions; sixth, other methods determined through negotiation.
1. Self-investment and implementation of transformation
This means that the owners of scientific and technological achievements (universities, scientific research institutes or teams of scientific researchers) raise funds on their own, establish enterprises or divisions, and independently complete subsequent development, production, marketing and sales. This method is suitable for new products with clear market prospects and the team with industrialization capabilities.
Advantages:First, strong control: retain full control over the direction of technological development, business decisions and brand building. Second, maximum returns: keep all the economic benefits of commercialisation without sharing profits. Third, strategic independence: use the technology as a long-term source of core competitiveness and build technological barriers to entry.
Disadvantages:First, the risks are highly concentrated and you need to bear all risks such as technology, market, management, and capital alone. The second is the high requirements on the team: scientific research teams often lack experience and capabilities in business management, market development and capital operations. Third, there is a large demand for funds, and a large amount of continuous capital investment is required from laboratory to large-scale production.
Operation points:First, build the team: establish a multidisciplinary team with expertise in technology, management, marketing and finance. Second, develop the business plan: prepare a detailed, practical plan defining product positioning, market strategy and financial projections. Third, secure funding: ensure sufficient startup capital and access to subsequent financing, such as government funds and venture capital. Fourth, intellectual property Protection: Carry out a complete patent layout in advance and build an intellectual property moat.
2. Transfer technology and implement transformation
It refers to the one-time paid transfer of the ownership or use rights of scientific and technological achievements to the transferee (usually an enterprise) by the owner of the achievement through a technology trading market or agreement. This method is suitable for scientific research units that have no intention of industrialization or whose technology is not a core strategic direction.
Advantages:First, quick monetisation: obtain cash returns rapidly and recover R&D costs. Second, transfer risk: shift subsequent commercialisation risks and investment requirements to the acquiring party. Third, focus on research: researchers and institutions can concentrate on new R&D activities.
Disadvantages:First, the loss of long-term returns: after an outright sale, the seller cannot share in potentially substantial future increases in the technology’s value. Second, valuation difficulties: technology is difficult to value accurately and may be undervalued in a transaction. Third, limited subsequent influence: the seller loses control over the technology’s future development and application.
Operation points:The first is value assessment, hiring a professional third-party organization to conduct intellectual property value assessment as a pricing reference. Second, the contract is rigorous and the technical content, scope of rights, delivery standards, confidentiality clauses, follow-up support and liability for breach of contract are clearly defined in the transfer contract. The fourth is to find suitable transferees and select partners with industrialization capabilities and integrity to ensure that the technology can be successfully applied.
3. License use implementation transformation
It means that the owner of the results (licensor) authorizes the licensee to use its technology within a specific scope and within a specific time by signing a licensing contract, while retaining ownership of the technology. This method is suitable for platform-based and basic technologies and has a wide range of applications.
Advantages:First, recurring income: an upfront fee plus royalties typically provides long-term returns linked to the technology’s market performance. Second, diversified risk: licensing to several parties spreads commercialisation risk. Third, retained ownership: the owner keeps the technology and can pursue further development or other forms of collaboration.
Disadvantages:First, it is complex to manage, requiring supervision of multiple licensees to ensure compliance with license terms (such as sales data verification). Second, competition may be fostered, and licensees may grow into competitors in the technology field. The third is the uncertainty of income. The income is directly related to the market development ability of the licensee, and there is uncertainty.
Operation points:One is the licensing strategy, which is clearly exclusive license(licensed to only one person), exclusive license (only available to the licensor and licensee), or general license (licensed to many). The second is pricing and sharing, reasonably setting entry fees and sales commission ratios, and establishing a clear accounting verification mechanism. The third is scope limitation, which strictly limits the licensed technical field, geographical scope and term in the contract.
4. Implementation and transformation of cooperation results
It means that the owner of the results and the enterprise jointly invest capital, technology, human resources and other resources to cooperate in subsequent development, testing and industrialization activities. This approach is suitable when technology requires continuous development and the resources of both parties are highly complementary.
Advantages:First, complementary strengths: combine universities’ research capabilities with companies’ strengths in engineering, commercialisation and finance. Second, shared risk: both parties share investment and risk, reducing the burden on either side. Third, efficient commercialisation: close connections between research and the market enable a faster response to market demand.
Disadvantages:First, high communication costs, Industry, academia and research Cultural differences can lead to miscommunication and inconsistent goals. Second, the ownership of intellectual property rights is complicated, and disputes are likely to arise over the ownership of intellectual property rights for new results produced through cooperation. Third, management and coordination are difficult, and effective project management and decision-making mechanisms need to be established.
Operation points:First, clarify rights, responsibilities and benefits: agree at the outset on each party’s investment, division of work, decision-making mechanisms and exit terms. Second, agree on intellectual property: clearly define in advance how existing intellectual property may be used, and how ownership and benefits from new intellectual property will be allocated. Third, create a joint team: establish a project management team with members from both parties to ensure clear communication and efficient collaboration.
5. Implementation and transformation of technology investment
It means that after the owner of the achievement values and evaluates the intellectual property rights of scientific and technological achievements, he or she invests in a newly established or existing company as an intangible asset, becomes a shareholder of the company, and shares the company's growth income. This method is suitable when technology is the core competitiveness of the company and the founder is willing to operate it for a long time.
Advantages:The first is deep binding, which closely binds the long-term interests of the technical side with the enterprise and encourages the technical side to continue to provide support. The second is to share long-term value. If the company develops successfully, it can obtain capital appreciation income that far exceeds the technology transfer fee. The third is to alleviate cash pressure and save enterprises early cash expenditures.
Disadvantages:First, the process is complex, involving multiple legal and business links such as asset valuation, property rights changes, equity registration, and corporate governance. Second, the cycle is long, the risk is high, the investment return cycle is long, and if the company fails, all the money will be lost. Third, the equity is thin, and subsequent financing may cause the technology party’s equity to be diluted.
Operation points:The first is to standardize the assessment. A qualified assessment agency must issue an assessment report and complete the registration of state-owned assets (if involved). The second is to improve legal documents, sign detailed shareholder agreements, company articles of association, and clarify the rights and obligations of technology shares, equity exit mechanisms, etc. The third is to rationally design the ownership structure and reasonably determine the proportion of technology stocks, which should not only reflect the value of technology, but also consider the contributions of other shareholders and the company's long-term development.
6. Industry-university-research collaborative innovation
This is a deeper and more front-end cooperation model, which refers to the in-depth cooperation between enterprises, universities, and scientific research institutions from the stage of basic research or applied basic research, jointly defining problems, joint research and development, and ultimately sharing the results. This approach is suitable for forward-looking and strategic technology research and development and long-term strategic cooperation.
Advantages:First, the R&D orientation is clear. R&D activities are targeted at industrial needs and market pain points from the beginning, resulting in a shorter transformation path. The second is the optimal allocation of resources, realizing the efficient flow and integration of talents, knowledge, technology, funds and information in the innovation chain. The third is to improve innovation capabilities: it helps to build a long-term, strategic technological innovation alliance.
Disadvantages:First, exceptionally demanding cooperation arrangements: effective long-term mechanisms require strong mutual trust, balanced interests and cultural integration. Second, the greatest management complexity: coordinating multiple parties, long timescales and diverse objectives is difficult. Third, substantial initial investment: both parties must commit considerable resources early, while returns take time to materialise.
Operation points:First, establish a joint entity, such as a jointly operated laboratory, R&D centre or innovation alliance. Second, cooperate strategically: the partnership should be based on both parties’ long-term development strategies rather than short-term projects. Third, build an innovation ecosystem encompassing joint talent development, resource sharing and jointly created and shared research outputs. Fourth, use government and policy support: actively draw on policies and funding that support industry–university–research collaboration.
Summary and suggestions
1. There is no "optimal" way, only the "most appropriate" way.Southwest University Changshu Research Institute think Which method to choose depends on many factors such as technological maturity, the unit/team's own resources and capabilities, risk appetite, and expectations for long-term returns.
2. Combination application is the norm.In practice, multiple methods are often used in combination. For example, first conduct a pilot test through "cooperation and joint implementation", and after success, establish a company with "technological pricing investment" and "license the use" of some non-core technologies.
3. Professional services are crucial.No matter which method you choose, it is highly recommended to introduce technical manager, legal advisors, financial advisors and asset appraisal agencies and other professional services to avoid risks, protect rights and interests, and improve conversion success rates.
Source: Guoke Torch Business Incubator Research Center