A central motive of the Engineering Research Centers (ERC) program is to form partnerships between academia and industry in systems-oriented research areas that are critical to the Nation's economic strength. Each ERC collaborates with industry from the early stages of its vision creation and strategic planning, and collaboration extends to technology development and application. By thus expanding and accelerating technology transfer and eventual commercial use, this approach bridges the traditional technology transfer gap between the single university investigator and industrial adopters of academic research results.

The ERCs are distinctive among NSF research centers in this embracing of industry throughout the entire cycle of technology creation, development, and implementation. Each ERC team envisages and plans technology development with its industrial partners from the outset. Each center's strategic plan, developed with industrial members, helps identify areas for joint projects and experimental testbeds for validating research results in practical applications. NSF holds ERCs responsible for tracking their research results through commercial implementation.

ERCs must build large research programs with considerable financial support from industry. While some support may be in the form of contractual agreements with deliverables, in many centers an equivalent or greater sum consists of unrestricted industrial grants to the center. Special emphasis is often placed on attracting small and medium-sized companies to ERCs because of their more rapid acceptance of new technologies and rapid growth potential. ERCs are not discouraged from involving foreign-owned companies as long as reciprocity of information, expertise, and people is emphasized (see Section 5.3.1.5). In 1999-2000, 10% of ERCs' industrial members were foreign-owned companies.

According to data gathered by individual centers and by NSF, ERCs have been very successful in attracting and providing benefits to industry. In 1999-2000 there were 439 industrial memberships in 18 centers, or an average of 24 companies per center. The total number of companies involved was 326, since many companies are members of two or more ERCs. Of these companies, 25% were small businesses, 10% medium-sized, and 65% large. Equally impressive is the large number of technologies that have been invented by ERCs and implemented by their industrial partners. For example, as of fall 2000, a total of 347 patents had been awarded to 30 ERCs, 1,422 software licenses had been issued to companies, and 68 companies had been formed as spin-offs of ERC research. In addition, hundreds of discrete innovations had made their way into use in industry.

While all ERCs are expected to plan, create, validate, and transfer new technologies, some of these activities inevitably receive greater emphasis at different stages in a center's life cycle. New "start-up" centers (years 1-3) necessarily focus on strategic planning with industrial members, attracting new members to their efforts, and developing forums for interaction. Mid-term centers (years 4-7) must focus on demonstrating successful industrial collaboration and technology transfer results, promising more to come beyond the sixth-year review. Mature centers (years 8-10/11 ) are putting new technologies into play while attracting new companies and finding new ways of teaming with industry without NSF support, including generating industrial endowments. Successful centers engage in long-term planning jointly with industrial members beginning in the early stages.

Experience shows that the enthusiasm and appeal of a start-up center is very effective in attracting industry involvement; but as centers mature, industrial collaboration requires more work, as sponsors become more demanding. On the other hand, age confers the advantages of experience and credibility. In the early stages, centers need to set modest membership fees, focus research on knowledge and technology development, and use industry as a partner in identifying problems. In later stages, centers may shift their base to large contracts with specific companies; research then should include a focus on applications and field-scale development based on the knowledge and technology developed, while maintaining a base of new and exploratory work.

Another way of viewing the center's life cycle is to consider that, in the first few years, NSF acts as a venture capitalist, funding a build-up of infrastructure and providing substantial leverage to industrial support. By year 6, the center has "gone public," establishing a certain amount of credibility with regard to its benefits to industry, and begins to face a new set of challenges. With the infrastructure in place, the center matures, and the issue of delivery becomes preeminent.

Industrial collaboration with ERCs extends beyond the development and transfer of technology. Industrial members become involved not only in strategic planning and collaborative research, but also in many educational activities. Industrial members give practical experience to ERC faculty and students by hosting faculty sabbaticals, student internships, and on-site ERC seminars. Members also participate at the center in hands-on courses, seminars, and co-advising graduate students.

Industrial involvement in the early stages of technology planning and development provides substantial payoffs when ERC students graduate. Member companies employ a large fraction of ERC graduates. Many of the hiring companies have noted that ERC graduates, by virtue of their systems-oriented training, are more skilled at technological innovation and product/process development than their non-ERC counterparts. They also are capable of integrating knowledge across disciplines, working in teams, understanding industrial needs, and addressing problems from an engineering systems perspective. Industrial sponsors typically comment that ERC students "land on their feet running" and "do not require the usual 12 to 18 months to come up to speed." Many ERCs and their industrial members agree that students are the best and most lasting form of technology transfer. (See Section 5.5.1.3 for a more detailed discussion of the job performance of ERC graduates.)

The ERCs' relationships with companies are experiments. Each one is unique, depending on the nature of the research undertaking, the scope and type of the industries involved, and the strategic direction of the center. Within this diversity there are common issues, which each center must resolve to create a functioning partnership with industry. The objective of an ERC should be to establish a very broad industrial constituency. Emphasis on the dollar amounts of support should be balanced by a focus on the intellectual and economic potential of a collaborative effort.

Ultimately, the ERCs are testbeds for broader cultural change in university-industry collaborative research. They are pioneering new ways of bringing research results to market, breaking down many traditional barriers that have hindered cooperation between universities and industry. Every lesson they learn makes it easier for those who follow to work together productively, as the working partnership of university administrations and faculties with corporate researchers develops. This is perhaps even more true of the centers that have graduated from NSF support, since those centers operate without federal subsidies and therefore must justify their benefits to both their host universities and their industrial members.

This chapter discusses some of the most effective practices that existing ERCs have learned to use in conducting industrial affiliates programs. It addresses issues such as establishing a partnership with industry, building an industrial constituency, the benefits and difficulties of industrial interaction, and the role that the NSF plays in this involvement. Case studies are used to illustrate some effective approaches. At the end of the chapter (Section 5.7) is a summary of the main lessons that have been learned; most of the sections also have a listing of specific lessons learned.

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